/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/061218.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, December 18, 2006, Vol. 10, No. 300 Headlines ADELPHIA COMMS: Rigases Want $600,000 as Additional Defense Cost ADELPHIA COMMS: Wants Lucent to Produce Withheld Documents ADVANCED MICRO: Forecasts 20% Increase in Shipments for 2007 AMERISOURCEBERGEN CORP: Earns $467.7 Mil. in Year Ended Sept. 30 ANDERSON SECOND: Case Summary & 4 Largest Unsecured Creditors ASARCO LLC: Wants Until May 16 to Decide on Leases ASARCO LLC: Wants Removal Deadline Extended to May 11 ATMEL CORP: NASDAQ Conditionally Grants Continued Listing ATMEL CORP: Intends to Sell UK & Germany Wafer Fabrication Plants AURIGA LABORATORIES: Posts $3.5MM Net Loss in 2006 Third Quarter AVAYA INC: Earns $48 Million in Fiscal Quarter Ended Sept. 30 BEAZER HOMES: Earns $388.8 Million in Fiscal Year Ended Sept. 30 BELL MICROPRODUCTS: Commences Cash Tender Offer for 3-3/4% Notes CALPINE CORP: Wants Court to OK Use of $258-Mil. Cash Collateral CALPINE CORP: Goldendale Facility Auction Scheduled on February 5 CALPINE CORP: Wants to Effectuate CDN$660MM Greenfield Financing CAMPUS CREST: Case Summary & Five Largest Unsecured Creditors CAPITAL AUTO: DBRS Places $15-Million Class D Notes' Rating at BB CENTRAL VERMONT: VPS Board Approves 4.07% Rate Increase CLIENTLOGIC CORP: Revised Merger Plan Cues Moody's Rating Review CONTINENTAL AIRLINES: Schedules $292-Mil. 4th Qtr. Debt Payments COUDERT BROTHERS: Seeks Extension of Excl. Plan-Filing Period CROWN CASTLE: Moody's Withdraws Ratings Following Debt Repayment CSC HOLDINGS: 6-3/4% Notes' Exchange Offer Extended Until Jan. 16 DOLLAR GENERAL: Posts $5.285MM Net Loss in Quarter Ended Nov. 3 DURA AUTOMOTIVE: Eight Vendors Want to Reclaim Prepetition Goods ENERSIS SA: Moody's Lifts Sr. Debt Ratings to Baa3 from Ba1 ENTERGY NEW ORLEANS: Panel Asserts Illegal Postpetition Payments ENTERGY NEW: Judge LeMelle Refers Hibernia Action to Bankr. Court FOAMEX INTERNATIONAL: Wants Plan Solicitation Procedures Amended FOAMEX INT'L: U.S. Trustee Amends Creditors Panel Membership FONIX CORP: Sells $1,038,750 9% Debentures to McCormack Avenue FONIX CORP: Sells Series E 9% Debentures to Southridge Partners GENESCO INC: Earns $16 Million in 2006 Third Quarter Ended Oct. 29 GRANITE BROADCASTING: Wants to Borrow $25 Mil. from Silver Point GRAYSON CLO: Moody's Rates $31-Mil. Class D Senior Notes at Ba2 GUARDIAN TECH: Sept. 30 Balance Sheet Upside-Down by $1.1 Million GUNDLE SLT: Volatile Prices Cue Moody's SGL Rating Downgrade HILTON HOTELS: Moody's Holds Ba3 Rating on $46-Mil. Class F Certs. HOLLINGER INC: Illinois Court Mulls Dismissal of Securities Suit ING INVESTMENT: Moody's Rates $13-Mil. Class D Notes at Ba2 J. CREW: October 28 Equity Deficit Narrows to $55.1 Million JO-ANN STORES: Earns $100,000 in Third Quarter Ended Oct. 28 JP MORGAN: Moody's Holds Junk Rating on $9.2 Million of Debentures KB HOMES: To Record at Least $235MM of Non-Cash Impairment Charges KUSHNER-LOCKE: Can Access Lender's Cash Collateral Until May 31 LARGE SCALE: Court Confirms 1st Amended Joint Plan of Liquidation LEAP WIRELESS: Completes $31.8-Mil. Spectrum License Acquisition LIME ENERGY: Posts $4.1 Mil. Net Loss in 2006 Third Quarter LODGENET ENTERTAINMENT: Moody's Holds Corp. Family Rating at B1 MICHAEL LEMBO: Case Summary & 3 Largest Unsecured Creditors MSC MEDICAL: Growth Plan Shortfalls Cue Moody's Negative Outlook MSDWMC OWNER: Losses Cue Moody's to Cut Ratings on 5 Note Classes NATIONAL LAMPOON: Jeff Gonzalez Resigns as Chief Financial Officer NORD RESOURCES: Sept. 30 Balance Sheet Upside-Down by $4.3 Million NORD RESOURCES: Platinum Shareholders Approve Merger Transaction ORANGE COUNTY: Robert Franz Appointed as Deputy CEO/CFO ORBITAL SCIENCES: Earns $8.6 Million in 2006 Third Quarter PANTRY INC: Earns $89.2 Million in Fiscal Year Ended September 28 PATH 1: September 30 Balance Sheet Upside Down by $3.7 Million PEABODY ENERGY: Moody's Rates $500-Mil. Junior Debentures at Ba2 PLASTIPAK HOLDINGS: Moody's Shifts Outlook to Positive from Stable PREMIER DEVELOPMENT: Inks Pact with Adam Barnett to Settle Suit PREMIER DEVELOPMENT: May Wind Up Business and Delist Shares REFCO INC: Judge Drain Confirms Modified Joint Chapter 11 Plan ROLAND PUGH: Case Summary & 12 Largest Unsecured Creditors SCOTTS MIRACLE: Planned Recapitalization Prompts Moody's Review SIERRA CLO: Moody's Rates $16-Million Class B-2L Notes at Ba2 SINCLAIR BROADCAST: Moody's Holds Corporate Family Rating at Ba3 SKIPPERS INC: Case Summary & 19 Largest Unsecured Creditors SOLUTIA INC: Wants to Sell Texas Land to Shintech Inc. for $7.1MM SUN-TIMES MEDIA: Suspends $0.05 Per Share Quarterly Dividend SUPERVALU INC: Albertson's Plans Delisting of Term Units at NYSE TCR I: Disclosure Statement Hearing to Proceed on January 9 TEXOLA ENERGY: Gets Additional 10,000 Acres of Oil & Gas Leases UNITED COMPONENTS: UCI Holdco to Offer $235 Million of PIK Notes VISIPHOR CORP: Grants 948,133 Options to Officers and Directors WESTERN OAKS: Case Summary & 8 Largest Unsecured Creditors * Proposed Air Mergers Spur Congress to Plan Hearing * Fried Frank Opens Offices in Hong Kong & Adds Nine New Partners * BOND PRICING: For the week of December 11 - December 16, 2006 ********* ADELPHIA COMMS: Rigases Want $600,000 as Additional Defense Cost ---------------------------------------------------------------- James Rigas and Michael Rigas ask the U.S. Bankruptcy Court for the Southern District of New York to permit Associated Electric & Gas Services Limited to advance another $600,000 in defense costs from the Adelphia Communications Corporation and its debtor affiliates' Directors' and Officers' Liability Insurance Policies. James Rigas and Michael Rigas seek $300,000 each to cover the past due invoices for legal fees, consulting fees, and vendor fees. The Rigases further ask the Court to permit AEGIS to advance to Pete Metros, Erland Kailbourne, Les Gelber, and Dennis Coyle an additional $300,000 each for Defense Costs pursuant to the terms of the interim funding agreements between AEGIS and those four individuals. As reported in the Troubled Company Reporter on Oct. 12, 2006, the Honorable Robert E. Gerber of the U.S. Bankruptcy Court for the Southern District of New York permitted Associated Electric to advance an additional $300,000 for James Rigas and $300,000 for Michael Rigas to cover Defense Costs pursuant to the terms of the Agreement between the Rigases and AEGIS. Based in Coudersport, Pa., Adelphia Communications Corporation (OTC: ADELQ) -- http://www.adelphia.com/-- is the fifth-largest cable television company in the country. Adelphia serves customers in 30 states and Puerto Rico, and offers analog and digital video services, high-speed Internet access and other advanced services over its broadband networks. The Company and its more than 200 affiliates filed for Chapter 11 protection in the Southern District of New York on June 25, 2002. Those cases are jointly administered under case number 02-41729. Willkie Farr & Gallagher represents the ACOM Debtors. PricewaterhouseCoopers serves as the Debtors' financial advisor. Kasowitz, Benson, Torres & Friedman, LLP, and Klee, Tuchin, Bogdanoff & Stern LLP represent the Official Committee of Unsecured Creditors. Adelphia Cablevision Associates of Radnor, L.P., and 20 of its affiliates, collectively known as Rigas Manged Entities, are entities that were previously held or controlled by members of the Rigas family. In March 2006, the rights and titles to these entities were transferred to certain subsidiaries of Adelphia Cablevision, LLC. The RME Debtors filed for chapter 11 protection on March 31, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10622 through 06-10642). Their cases are jointly administered under Adelphia Communications and its debtor-affiliates chapter 11 cases. (Adelphia Bankruptcy News, Issue No. 154; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ADELPHIA COMMS: Wants Lucent to Produce Withheld Documents ---------------------------------------------------------- Adelphia Communications Corporation asks the U.S. Bankruptcy Court for the Southern District of New York to direct Lucent Technologies Inc. to: (1) immediately produce all documents withheld as attorney work product that predated May 2002 because there was no pending or anticipated litigation during that period between Lucent and Devon Mobile Communications L.P.; (2) immediately produce all 29 Pacchia Documents because they are not protected by the attorney-client privilege or the work product doctrine; (3) immediately produce all withheld documents identified as being sent or received by "Unknown" because Lucent has not established that the documents are privileged or protected by the work product doctrine; (4) revise the Lucent Privilege Log to provide sufficient and meaningful descriptions; (5) produce those remaining documents to the Court for an in camera inspection; and (6) to the extent the Court determines that any of the remaining documents is privileged, the Court should review those documents in camera to determine whether the privilege has been waived pursuant to the "at issue" doctrine. Lucent previously filed a claim for $44,721,520 against the Debtor, seeking recovery for millions of dollars allegedly owed by ACOM under a contract between Lucent and Devon Mobile Communications L.P. On May 4, 2006, ACOM served its first request for production of documents on Lucent. On Oct. 13, 2006, Lucent furnished ACOM a Privilege Log, which listed 89 withheld claims. Rona J. Rosen, Esq., at Klehr, Harrison, Harvey, Branzburg & Ellers LLP, in Philadelphia, Pennsylvania, asserts that the descriptions of all 89 withheld documents fail to meet the requirements of Rule 26(b)(5) of the Federal Rules of Civil Procedures: (a) Lucent does not describe the withheld items in sufficient detail so as to permit ACOM to assess the applicability of the alleged privilege; (b) Eight of the withheld documents lists the sender or recipient as "Unknown"; (c) About 29 withheld documents lists the sender or the recipient as Anthony Pacchia, an employee at Traxi LLC. Ms. Rosen relates that the Lucent Privilege Log states that Traxi employees are "consultants hired by Lucent and used in connection with this Matter" in an attempt to extend the privilege to Mr. Pacchia; and (d) All of the documents withheld as attorney work product predate May 2002. Devon was current on the payment of all of its Lucent invoices through April 15, 2002. Credit terms under the Lucent/Devon General Agreement were net 30 days after receipt of an invoice. The period of "anticipation of litigation" cannot reasonably be said to commence until invoices are unpaid and reasonable collection efforts have failed. Ms. Rosen contends that Mr. Pacchia and Traxi were hired by Lucent in the ordinary course of business to manage Lucent's credit risks generally and to otherwise assist Lucent's Global Assets Recovery group. Mr. Pacchia was not hired specifically to manage Lucent's credit risks under the Lucent/Devon General Agreement. Ms. Rosen adds that Mr. Pacchia was not also hired to assist Lucent's attorneys in advising Lucent on the Devon credit risk. Thus, she says, any Lucent communication to Mr. Pacchia is not privilege because he is not a Lucent employee. Ms. Rosen asserts there is no evidence that Mr. Pacchia or Traxi was engaged at a time when there was any anticipated or ongoing litigation between Lucent and Devon. Ms. Rosen relates Lucent refused to provide supplemental descriptions to enable ACOM to assess the applicability of the invoked privileges. Based in Coudersport, Pa., Adelphia Communications Corporation (OTC: ADELQ) -- http://www.adelphia.com/-- is the fifth-largest cable television company in the country. Adelphia serves customers in 30 states and Puerto Rico, and offers analog and digital video services, high-speed Internet access and other advanced services over its broadband networks. The Company and its more than 200 affiliates filed for Chapter 11 protection in the Southern District of New York on June 25, 2002. Those cases are jointly administered under case number 02-41729. Willkie Farr & Gallagher represents the ACOM Debtors. PricewaterhouseCoopers serves as the Debtors' financial advisor. Kasowitz, Benson, Torres & Friedman, LLP, and Klee, Tuchin, Bogdanoff & Stern LLP represent the Official Committee of Unsecured Creditors. Adelphia Cablevision Associates of Radnor, L.P., and 20 of its affiliates, collectively known as Rigas Manged Entities, are entities that were previously held or controlled by members of the Rigas family. In March 2006, the rights and titles to these entities were transferred to certain subsidiaries of Adelphia Cablevision, LLC. The RME Debtors filed for chapter 11 protection on March 31, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10622 through 06-10642). Their cases are jointly administered under Adelphia Communications and its debtor-affiliates chapter 11 cases. (Adelphia Bankruptcy News, Issue No. 154; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ADVANCED MICRO: Forecasts 20% Increase in Shipments for 2007 ------------------------------------------------------------ Advanced Micro Devices Inc. anticipates a 20% increase in shipments in 2007, Ian King of Bloomberg News reports. In a presentation to New York analysts, AMD chief financial officer Robert Rivet forecasted that the company's gross margin would increase 50% in 2007, instead of the 47% average in the previous four quarters. "They gave a very optimistic long-term view," commented John Lau, an analyst at Jefferies & Co. Mr. Lau noted that the company did not focus on the current quarter's price increases. Citing Mercury Research, Bloomberg relates that AMD's market share is up 17% from last year. The company's share of sales increased by 23.3% in the third quarter of 2006. The company's $5.4 billion acquisition of graphics chip maker ATI Technologies Inc. in October will help win more market share from Intel Corp., AMD chief executive officer Hector Ruiz said. The company is benefiting from large PC makers diversifying their product lines to include AMD's microprocessors. AMD will release its 2006 fourth quarter financial results in January 2007. About AMD Based in Sunnyvale, California, Advanced Micro Devices Inc. (NYSE: AMD) -- http://www.amd.com/-- designs and produces innovative microprocessor and graphics and media solutions for the computer, communications, and consumer electronics industries. The company has corporate locations in Sunnyvale, California, Austin, Texas, and Markham, Ontario, and global operations and manufacturing facilities in the United States, Europe, Japan, and Asia. * * * As reported in the Troubled Company Reporter on Oct. 31, 2006, in connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. technology semiconductor and distributor sector, the rating agency affirmed its Ba3 corporate family rating on Advanced Micro Devices, Inc. As reported in the Troubled Company Reporter on Oct. 6, 2006, Standard & Poor's Ratings Services affirmed its 'B+' corporate credit rating on AMD. The rating agency also assigned its 'BB-' bank loan rating, one notch above the corporate credit rating, and a '1' recovery rating to the company's proposed $2.5 billion senior secured term loan, to be used as partial funding of the acquisition. S&P further raised its rating on the company's $600 million ($390 million outstanding) senior notes to 'B+' from 'B'. AMERISOURCEBERGEN CORP: Earns $467.7 Mil. in Year Ended Sept. 30 ---------------------------------------------------------------- AmerisourceBergen Corporation reported $467.7 million of net income on $61.2 billion of revenues for the fiscal year ended Sept. 30, 2006, compared with $264.6 million of net income on $54.6 billion of revenues for fiscal 2005. "Our outstanding performance in the September quarter and the fiscal year exceeded our internal expectations and sets the stage for continued strong performance in fiscal 2007," said R. David Yost, AmerisourceBergen's Chief Executive Officer. "Our record operating revenue was again above our expectations, and our excellent earnings per share performance in the quarter was driven by great results in the pharmaceutical distribution business, including strong growth in our specialty business, improvement in the PharMerica segment, and reduced interest expense and shares outstanding. With $1.3 billion in cash and no net debt, our balance sheet continues to be strong and our financial flexibility significant." AmerisourceBergen's operating revenue was $14.6 billion in the fourth quarter of fiscal 2006 compared to $13.0 billion for the same period last year, a 13 percent increase. Bulk deliveries in the quarter were $1 billion, up 5 percent over last fiscal year's fourth quarter. Consolidated operating income in the fiscal 2006 fourth quarter increased 26 percent to $195.3 million, primarily due to the strong performance of the Pharmaceutical Distribution segment and improved performance in the PharMerica segment. In addition, the negative impact in the quarter of $7.8 million of facility consolidations, employee severance and other costs, was offset by an $8.9 million gain from the settlement of pharmaceutical manufacturer antitrust litigation cases. In the prior year's fiscal fourth quarter, consolidated operating income was negatively impacted by $12 million of facility consolidations, employee severance and other costs, primarily from the outsourcing of information technology services. In the fourth quarter of fiscal 2006, the company had $808,000 of net interest income compared to $9.4 million of net interest expense in the prior year's fourth quarter. The year-ago fourth quarter also had a $110.9 million charge relating to the early retirement of debt. Cash used in operations for the fourth quarter of fiscal year 2006 was $77 million. Cash provided by operations in fiscal year 2006 was $807 million, above expectations. For fiscal 2006, AmerisourceBergen's operating revenue was $56.7 billion compared to $50 billion for last year, a 13 percent increase. Bulk deliveries in the 2006 fiscal year decreased 1 percent to $4.5 billion. Total revenue in fiscal year 2006 was $61.2 billion. Consolidated operating income in the 2006 fiscal year increased 18 percent over the previous fiscal year to $748.7 million primarily due to improved gross profit in the pharmaceutical distribution segment. "The excellent results in the fiscal 2006 fourth quarter reflect outstanding operating performance across all our businesses in the Pharmaceutical Distribution segment and operating improvement in the PharMerica segment," said Kurt J. Hilzinger, AmerisourceBergen's President and Chief Operating Officer. "Drug Corporation's revenue growth in the fourth quarter was driven by contributions across all our customer segments as well as our Canadian operations, which now provide more than $1.5 billion in annualized revenue. "Optimiz(R), our program to enhance the efficiency of our distribution center network, improved our cost structure in the quarter. We began in 2001 with 51 distribution centers. At the end of fiscal 2006 we have largely completed our network reconfiguration on schedule and on budget, and now have 28 distribution centers, including six new, state-of-the-art facilities. In fiscal 2007, we expect to consolidate an additional two to three distribution centers and continue to install our warehouse management system, which will drive continued savings. Our customer-focused Transform program, designed to improve value to the customers and deliver better margins for the Drug Corporation, also aided performance in the quarter. "Our Specialty Group's strong operating revenue performance in the fourth quarter led to nearly $10 billion in operating revenue in fiscal 2006, as it continued to grow its market-leading oncology businesses faster than the overall pharmaceutical market. "The Packaging Group continued to expand its growing pipeline of contract packaging programs for manufacturers and to broaden its compliance packaging solutions for healthcare providers. Anderson Packaging, our U.S. contract packaging unit, had especially strong performance in the quarter. "Our PharMerica segment showed improvement in the fourth quarter. Revenues in the segment increased 5 percent over the previous fiscal year's fourth quarter, with Long Term Care (PharMerica LTC) revenues up 6 percent. In October, the company signed a definitive agreement to combine its PharMerica LTC institutional pharmacy business with that of Kindred Healthcare's institutional pharmacy business in a tax-free spin-off and merger to form a new, independent publicly traded company. Our Workers' Compensation business will remain in the segment after the spin-off." At Sept. 30, 2006, the company's consolidated balance sheet showed $12.8 billion in total assets, $8.6 billion in total liabilities, and $4.1 billion in total stockholders' equity. Full-text copies of the company's consolidated financial statements for the fiscal year ended Sept. 30, 2006, are available for free at http://researcharchives.com/t/s?1722 About AmerisourceBergen AmerisourceBergen (NYSE:ABC) -- http://www.amerisourcebergen.com/ -- is one of the world's largest pharmaceutical services companies serving the United States, Canada and selected global markets. AmerisourceBergen's service solutions range from pharmacy automation and pharmaceutical packaging to pharmacy services for skilled nursing and assisted living facilities, reimbursement and pharmaceutical consulting services, and physician education. AmerisourceBergen is headquartered in Valley Forge, PA, and employs more than 14,000 people. * * * As reported in the Troubled Company Reporter on Nov. 7, 2006, Moody's Investors Service affirmed AmerisourceBergen Corp.'s Ba1 Corporate Family Rating. ANDERSON SECOND: Case Summary & 4 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: The Anderson Second Family Limited Partnership P.O. Box 91037 Saint George, UT 84791 Bankruptcy Case No.: 06-42312 Chapter 11 Petition Date: November 30, 2006 Court: Northern District of California (Oakland) Judge: Edward D. Jellen Debtor's Counsel: Eric A. Nyberg, Esq. Kornfield, Paul and Nyberg 1999 Harrison St. #2675 Oakland, CA 94612 Tel: (510) 763-1000 Fax: (510) 273-8669 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's 4 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Dublin Corporate Center LLC Breach of contract $1,295,700 John Dioguardi, Esq. claim 4516 Butress Court Concord, CA 94518 Greg Anderson Attorney fees, $278,000 P.O. Box 910371 Property taxes, Saint George, UT 84791 Land fees Franchise Tax Board Taxes $130,000 Bankruptcy Unit P.O. Box 2952 Sacramento, CA 95827 Theresa Muley Attorney's fees $20,000 5820 Stoneridge Mall Rd., #100 Pleasanton, CA 94588 ASARCO LLC: Wants Until May 16 to Decide on Leases -------------------------------------------------- ASARCO LLC and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of Texas in Corpus Christi to further extend their time to decide whether to assume, assume and assign, or reject their non-residential real property leases until May 16, 2007. Judith W. Ross, Esq., at Baker Botts L.L.P., in Dallas, Texas, tells the Court that the Debtors need additional time to determine their reclamation obligations under certain leases with the Bureau of Land Management and Bureau of Indian Affairs of the U.S. Department of the Interior, and the members of the San Xavier District of the Tohon O'odham Nation. Ms. Ross relates that the Debtors and the Indian and Government Parties are currently working to bring finality to the potential claims related to the Indian Leases. As a result of the meetings, the Indian and the Government Parties agree to provide a "term sheet", which will make specific proposals for resolving the uncertainty regarding the Debtors' reclamation obligation for the Indian Leases. About ASARCO LLC Tucson, Ariz.-based ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services and investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since Apr. 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05-21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. (ASARCO Bankruptcy News, Issue No. 34; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/ or 215/945-7000). ASARCO LLC: Wants Removal Deadline Extended to May 11 ----------------------------------------------------- ASARCO LLC and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of Texas in Corpus Christi to further extend the period within which they may remove civil actions through and including May 11, 2007. Nathaniel Peter Holzer, Esq., at Jordan, Hyden, Womble, Culbreth, & Holzer, P.C., in Corpus Christi, Texas, contends that the Debtors are parties to a myriad of lawsuits in various state and federal courts. The issues involved in many of those lawsuits are complex and many require individual analysis of each case. Mr. Holzer asserts that the Debtors need additional time to review the lawsuits at issue to determine whether removal of the various cases is in the best interest of the bankruptcy estates. In addition, Mr. Holzer says an extension of the deadline would aid the efficient an economical administration of the estates. About ASARCO LLC Tucson, Ariz.-based ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services and investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since Apr. 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05-21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. (ASARCO Bankruptcy News, Issue No. 32; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/ or 215/945-7000). ATMEL CORP: NASDAQ Conditionally Grants Continued Listing --------------------------------------------------------- Atmel Corp. disclosed that the NASDAQ Listing Qualifications Panel has granted the company's request for continued listing on the NASDAQ Stock Market subject to certain conditions. On Feb. 9, 2007, Atmel must file with the Securities and Exchange Commission its Forms 10-Q for its second quarter ended June 30, 2006, and third quarter ended Sept. 30, 2006, as well as any necessary restatements for prior financial periods. The company must also be able to demonstrate compliance with all other requirements for continued listing on the Nasdaq Stock Market. In granting the extension, the Panel has required that through Feb. 9, 2007, Atmel will notify the Panel of the occurrence of any significant events, including any event that may call into question Atmel's historical financial information or affect the company's ability to comply with any NASDAQ listing requirement or satisfy the Feb. 9, 2007, deadline. In addition, any submissions to the Panel, press releases, or public filings prepared by Atmel will be subject to review by the Panel, which may, at its discretion, request additional information before determining that Atmel has complied with the terms of the Panel's decision. The Audit Committee of the company's Board of Directors initiated an independent investigation regarding the timing of past stock option grants and other potentially related issues. The Audit Committee, with the assistance of independent legal and forensic accounting experts, has reached a preliminary determination that, in connection with the requirements of Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees, the actual measurement dates for certain stock options differed from the recorded measurement dates for those stock options. Based on the Audit Committee's preliminary determination, the company expects that the difference in these measurement dates will result in material non-cash, stock-based compensation expenses. The company disclosed the decision of the Audit Committee that prior financial statements should no longer be relied upon. The Audit Committee has not completed its work nor reached final conclusions and is continuing its investigation into the circumstances that gave rise to the differences. The Audit Committee is making every effort to complete its investigation, and the company will make every effort to file its restated financial statements as soon as practicable after the completion of the investigation. There can be no assurance that Atmel will remain listed on the NASDAQ Global Market unless and until the company fully satisfies the terms of the Panel's decision. Headquartered in San Jose, Calif., Atmel Corp. (Nasdaq: ATML) -- http://www.atmel.com/-- designs and manufactures microcontrollers, advanced logic, mixed-signal, nonvolatile memory and radio frequency components. Leveraging one of the industry's broadest intellectual property technology portfolios, Atmel is able to provide the electronics industry with complete system solutions. It is focused on consumer, industrial, security, communications, computing, and automotive markets. Headquartered in San Jose, Calif., Atmel Corp. (Nasdaq: ATML) -- http://www.atmel.com/-- designs and manufactures microcontrollers, advanced logic, mixed-signal, nonvolatile memory, and radio frequency components. Leveraging one of the industry's broadest intellectual property technology portfolios, Atmel is able to provide the electronics industry with complete system solutions. It is focused on consumer, industrial, security, communications, computing, and automotive markets. * * * Standard & Poor's Rating Services assigned its single-B long-term foreign issuer and long-term local issuer credit ratings to Atmel Corp. on Oct. 24, 2001, and said the outlook, at that time, was negative. ATMEL CORP: Intends to Sell UK & Germany Wafer Fabrication Plants ----------------------------------------------------------------- Atmel Corp. reported strategic restructuring initiatives designed to enhance profitability, accelerate the company's growth and reduce costs. These initiatives include: -- A focus on the company's high-growth, high-margin proprietary product lines. To better align Atmel's resources with highest-growth opportunities, the company is redeploying resources to accelerate the design and development of products that target expanding markets and is halting development on lesser, unprofitable, non-core products. -- Optimize Atmel's manufacturing operations. Atmel will seek to sell its wafer fabrication facilities in North Tyneside, United Kingdom, and Heilbronn, Germany. These actions are expected to increase manufacturing efficiencies by better utilizing remaining wafer fabrication facilities while reducing future capital expenditure requirements. -- The adoption of a fab-lite strategy. Through better utilization of its remaining wafer fabs and the expansion of its foundry relationships, Atmel will significantly reduce manufacturing costs and continue to design and develop innovative new products utilizing world-class manufacturing facilities. The company anticipates cost savings in the range of $70 million to $80 million in 2007 reaching an annual rate of $80 million to $95 million by 2008. Included in the cost savings is approximately $55 million per year resulting from the expected sale of the wafer fabrication facilities. Through a combination of voluntary resignations, attrition and other actions, Atmel expects a reduction in its non-manufacturing workforce of approximately 300 employees, or 10%. The company anticipates headcount to be reduced by approximately 1,000 additional employees upon completion of the sales of the North Tyneside and Heilbronn wafer fabrication facilities. Atmel will continue to meet the production needs of its worldwide customer base during this transition through the use of internal capacity and existing foundry partners. In addition, Atmel anticipates entering into a transition sourcing agreement with the eventual buyers of the wafer fabrication facilities. "These initiatives follow a thorough analysis of the company's operations and strongest opportunities for growth," Atmel president and chief executive officer Steven Laub said. "While this decision was difficult given the company's many dedicated employees, these actions are essential to better position Atmel to compete and drive value for our shareholders. "Focusing on our core business competencies, expanding our foundry relationships, and the adoption of a fab-lite model are the right strategies for Atmel to better serve our customers, reduce manufacturing costs, and enhance shareholder value." As a result of the initiatives, the company estimates it will record one-time restructuring and impairment charges in excess of $200 million in the fourth quarter of 2006 for fixed asset write- downs, severance, and other expenses associated with the restructuring. A significant portion of these non-recurring charges relate to the non-cash write-down of the North Tyneside manufacturing facility Atmel intends to sell. About Atmel Headquartered in San Jose, Calif., Atmel Corp. (Nasdaq: ATML) -- http://www.atmel.com/-- designs and manufactures microcontrollers, advanced logic, mixed-signal, nonvolatile memory, and radio frequency components. Leveraging one of the industry's broadest intellectual property technology portfolios, Atmel is able to provide the electronics industry with complete system solutions. It is focused on consumer, industrial, security, communications, computing, and automotive markets. * * * Standard & Poor's Rating Services assigned its single-B long-term foreign issuer and long-term local issuer credit ratings to Atmel Corp. on Oct. 24, 2001, and said the outlook, at that time, was negative. AURIGA LABORATORIES: Posts $3.5MM Net Loss in 2006 Third Quarter ---------------------------------------------------------------- Auriga Laboratories, Inc. and its subsidiaries have filed their consolidated quarterly financial statements for the quarterly period ended Sept. 30, 2006. The company reported a $3,522,993 net loss on $1,791,342 of revenues for the quarterly period ended Sept. 30, 2006, compared to a net loss of $424,558 on $730,349 of total revenues in the same quarter of 2005. At Sept. 30, 2006, the company's balance sheet showed $10,760,844 in total assets, $6,727,697 in total liabilities, and $4,033,147 in stockholders' equity. At March 31, 2006, the company had $2,133,430 in total assets, $4,018,462 in total liabilities, and $1,885,032 in stockholders' deficit The company's September 30 balance sheet also showed strained liquidity with $2,645,169 in total current assets available to pay $4,528,995 in total current liabilities coming due within the next 12 months. Since inception, the company has incurred significant operating and net losses and has been unable to meet its cash flow needs with internally generated funds. The company's cash requirements, primarily working capital requirements and cash for product development activities, have been satisfied through borrowings and the issuance of securities in a number of private placements. At Sept. 30, 2006, the company had cash and cash equivalents on hand of approximately $495,000, a negative working capital position of $1,883,826 and long-term debt commitments of $2,198,702. On a going forward basis, the company's primary business strategy is to continue to focus on its existing Extendryl(R) line of products, promote and sell the newly acquired Levall(R) product line and the Aquoral(TM) product line and continue to acquire proven brand name products. The company has successfully raised capital during the current quarter in the form of the issuance of two promissory notes, the proceeds of which were used for payments related to new license rights and working capital. The total proceeds from these notes were $2 million as of Sept. 30, 2006, with an additional amount of $250,000 received in October 2006. The company will need to continue to raise additional equity or debt financing to adequately fund its strategies and to satisfy its ongoing working capital requirements. A full-text copy of the company's financial statements for the quarterly period ended Sept. 30, 2006, is available for free at http://researcharchives.com/t/s?1726 Going Concern Doubt Jaspers + Hall, P.C., in Denver, Colorado, raised substantial doubt about Auriga Laboratories' ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Sept. 30, 2005. The auditor pointed to the Company's operating losses, has minimal working capital as of Sept. 30, 2005, and no ongoing source of income. About Auriga Laboratories Based in Norcross, Georgia, Auriga Laboratories(TM), Inc. -- http://www.aurigalabs.com/-- is a pharmaceutical company capitalizing on high-revenue markets and opportunities in the pharmaceutical industry through aggressive sales, integrated marketing and advanced in-house drug development capabilities. AVAYA INC: Earns $48 Million in Fiscal Quarter Ended Sept. 30 ------------------------------------------------------------- Avaya Inc. reported a net income of $48 million for the fourth fiscal quarter ended Sept. 30, 2006. Avaya's fourth fiscal quarter 2006 revenues increased five percent to $1.364 billion compared to $1.296 billion in the same period last year. For the fourth fiscal quarter last year, the company reported a $660 million net income. Those results included a tax benefit of $577 million from the reversal of the company's deferred tax valuation allowance, restructuring charges and a charge for in- process research and development. At Sept. 30, 2006 the company reported $5.2 billion in total assets, $3.1 billion in total liabilities, and $2.1 billion in total stockholders' equity. The company reported a $75 million operating income for the fourth quarter of 2006 and, excluding the restructuring charges, $137 million. In the year ago quarter, operating income was $82 million and excluding restructuring charges and a charge for in- process research and development, $107 million. "We finished fiscal 2006 with a strong quarter," said Lou D'Ambrosio, president and CEO, Avaya. "The transition by enterprises to IP telephony and Intelligent Communications continued to drive growth in product sales and IP line shipments. Also in the quarter, we captured operating leverage from our revenue growth and generated strong cash flow. And we took action to more effectively align our resources to capture market opportunities and to improve our cost structure. "As we move forward in fiscal 2007, we are focused on driving growth and extending our market leadership around Intelligent Communications, tenacious execution and productivity enhancements to deliver sustained value creation," Mr. D'Ambrosio said. During the fourth fiscal quarter of 2006, Avaya incurred restructuring charges of $62 million pre-tax, primarily related to workforce reductions in the United States and Europe. Avaya also said it expects to incur additional restructuring charges in the range of approximately $65 million to $75 million in the first half of fiscal 2007 related to workforce reductions. The savings from the fourth quarter of fiscal 2006 and first half of fiscal 2007 actions will be used to offset increased compensation-related expenses and to enhance and upgrade the company's workforce skills, reinvest in the business to strengthen Avaya's competitiveness and support revenue growth. Once the company has completed these additional restructuring actions, the company believes it should be able to reasonably estimate and make an addition to its reserve for future post employment benefits pursuant to Financial Accounting Standards No. 112, relating to its European operations, of up to approximately $70 million. For fiscal year 2006, Avaya reported net income of $201 million compared to net income of $921 million in fiscal 2005, which result included a tax benefit of $676 million. The company generated operating cash flow of $647 million in fiscal 2006 compared to $334 million in fiscal 2005. Fiscal 2006 revenues were $5.148 billion compared to fiscal 2005 revenues of $4.902 billion. Year-over-year revenues increased in both the company's products and services segments, as well as across all geographic regions. Worldwide product sales rose nine percent compared to the same period last year, with IP line shipments increasing in the high 20 percent range. Headquartered in Basking Ridge, N.J., Avaya Inc., (NYSE: AV) -- http://www.avaya.com.-- designs, builds and manages communications networks for more than one million businesses worldwide, including more than 90 percent of the FORTUNE 500(R). Focused on businesses large to small, Avaya is a world leader in secure and reliable Internet Protocol telephony systems and communications software applications and services. * * * As reported in the Troubled Company Reporter on Jan. 31, 2005, Standard & Poor's Ratings Services raised its corporate credit rating on Avaya, Inc., to 'BB' from 'B+'. As reported in the Troubled Company Reporter on Jan. 21, 2005, Moody's Investors Service upgraded the senior implied rating of Avaya, Inc., to Ba3 from B1. Moody's said the ratings outlook is positive. BEAZER HOMES: Earns $388.8 Million in Fiscal Year Ended Sept. 30 ---------------------------------------------------------------- Beazer Homes USA Inc. reported $388.8 million of net income on $5.5 billion of revenues for the fiscal year ended Sept. 30. 2006, compared with $262.5 million of net income on $5 billion of revenues in fiscal 2005. "Beazer Homes had record fourth quarter closings and revenues in fiscal 2006 as we focused on converting our existing backlog in what remains a challenging housing market," said President and Chief Executive Officer, Ian J. McCarthy. "Despite our strong close of fiscal 2006, most markets across the country continue to experience higher levels of resale home inventories, lower levels of demand for new homes, significant increases in cancellation rates and significantly higher discounting. As it is difficult to predict the duration of these factors, we have proactively taken steps to align our overhead structure and capital spending with our expectations for a reduced level of home closings in fiscal 2007. We believe this disciplined commitment to profitability and prudent capital allocation, coupled with our broad geographic and product diversity, will position us well for the continuing difficult market environment and the eventual upturn. We continue to believe that the long-term industry fundamentals, based on demographic driven demand and employment trends, together with further supply constraints, remain compelling." Total home closings of 6,411 in the quarter were 1% above the prior year's record quarter as decreased closings in Florida and the Mid-Atlantic were offset by increases in the West, Southeast and other homebuilding segments. Net new home orders totaled 2,064 homes for the quarter, a decline of 58% from the fourth quarter of the prior year, resulting from both reduced demand across the company's markets and a significantly higher rate of cancellations from the prior year. "We remain focused on reducing costs and efficiently allocating capital in this challenging business environment," said James O'Leary, Executive Vice President and Chief Financial Officer. "During September and October, we undertook a comprehensive review of our overhead structure in light of our reduced volume expectations for fiscal 2007, bringing our overall headcount down by approximately 1,000 positions, or 25%. We also reduced our controlled lot count by over 15% during the fourth quarter by eliminating non-strategic positions to align our land supply with our current expectations for home closings. These steps are intended to maintain our sound balance sheet and strong financial position so that we can capitalize on those future opportunities that will generate meaningfully higher returns prospectively." Operating margin declined to 8.0% in the fourth quarter as a result of a higher percentage of closings from lower margin markets, higher market driven sales incentives and costs associated with overhead structure realignment and exiting of land positions. These results included pre-tax charges of approximately $18.2 million to write off land options and exit positions that were no longer providing sufficient returns and $5.6 million to recognize inventory impairments. The company also incurred approximately $1.1 million in severance costs during the fourth quarter of fiscal 2006 related to the alignment of its overhead structure. During the fourth quarter of fiscal 2006, the company repurchased 557,400 shares of its common stock for $22.1 million under its 10 million share repurchase authorization. For fiscal year 2006, the company repurchased 3,648,300 shares for $205.4 million. At Sept. 30, net debt to total capitalization stood at 49.5%, and the company had no outstanding borrowings under its primary revolving credit facility. At Sept. 30, 2006, the company's balance sheet showed $4.6 billion in total assets, $2.9 billion in total liabilities, and $1.7 billion in total stockholders' equity. Full-text copies of the company's consolidated financial statements for the year ended Sept. 30, 2006, are available for free at http://researcharchives.com/t/s?1725 About Beazer Homes Headquartered in Atlanta, Beazer Homes USA, Inc., (NYSE: BZH) -- http://www.beazer.com/-- is one of the country's ten largest single-family homebuilders with operations in Arizona, California, Colorado, Delaware, Florida, Georgia, Indiana, Kentucky, Maryland, Mississippi, Nevada, New Jersey, New Mexico, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Texas, Virginia and West Virginia and also provides mortgage origination and title services to its homebuyers. * * * As reported in the Troubled Company Reporter on June 7, 2006, Moody's Investors Service assigned a Ba1 rating to $275 million of 8.125%, 10-year senior notes of Beazer Homes USA, Inc. At the same time, Moody's affirmed Beazer's corporate family rating of Ba1 and the Ba1 ratings on the company's existing senior note issues. The ratings outlook is stable. As reported in the Troubled Company Reporter on June 6, 2006, Fitch Ratings assigned a 'BB+' rating to Beazer Homes USA, Inc.'s $275 million, 8.125% senior unsecured notes due 2016. Fitch affirmed Beazer's 'BB+' Issuer Default, senior unsecured debt and unsecured bank credit facility ratings. The Rating Outlook is Stable. The issue will be ranked on a pari passu basis with all other senior unsecured debt, including the company's unsecured bank credit facility. BELL MICROPRODUCTS: Commences Cash Tender Offer for 3-3/4% Notes ---------------------------------------------------------------- Bell Microproducts Inc. has commenced a tender offer to purchase for cash, any and all of its $109,850,000 outstanding 3 3/4 % Convertible Subordinated Notes, Series B due 2024 at a purchase price equal to $1,000.00 per $1,000.00 of the principal amount of the Notes, plus accrued and unpaid interest to the date on which the Notes are purchased. The tender offer will expire at 9:00 a.m., New York City time, on Jan. 18, 2007, unless extended or earlier terminated. Payments of the tender consideration for Notes validly tendered and not withdrawn on or prior to the expiration date and accepted for purchase will be made as soon as practicable after the expiration date. Separately, Bell Micro commenced, on Dec. 7, 2006, a solicitation of consents to an amendment to the indenture covering the Notes and a waiver of defaults arising from the failure to file all reports and other information and documents which it is required to file with the U.S. Securities and Exchange Commission and, within fifteen days after it files the SEC Reports with the SEC, to file copies of the SEC Reports with the trustee. The proposed amendment would amend the indenture to eliminate any provision that would trigger a default for the failure to file or deliver any reports required to be filed with the SEC or the trustee. The proposed amendment and waiver requires approval of holders of a majority of the outstanding principal amount of Notes. The consent fee is $5.00 in cash per $1,000.00 in principal amount of Notes as to which consents have been provided. Bell Micro has amended the Consent Solicitation. Pursuant to the terms of the amended Consent Solicitation: (1) The Consent Date is extended to 5:00 p.m. New York City time on Dec. 14, 2006. (2) The definition of Eligible Tender Offer has been amended to require that Bell Micro have commenced the tender offer for the Notes, held the tender offer open for at least twenty business days and consummated the repurchase of the Notes at a price of $1000.00 for each $1000.00 principal amount of Notes prior to Feb. 28, 2007. (3) If Bell Micro receives the Required Consents, the indenture governing the notes will be amended to provide that, if Bell Micro fails to commence, hold open and consummate an Eligible Tender Offer, Bell Micro will make a one-time special interest payment equal to 8.5% of the outstanding principal amount of Notes to Holders of the Notes on the next interest payment date following the failure of Bell Micro to commence and hold open an Eligible Tender Offer. (4) No Second Consent Fee will be paid. The tender offer referred to above is intended to qualify as an Eligible Tender Offer as defined in the consent solicitation statement. The consummation of the tender offer is conditioned upon, among other things, receipt of the consent of the holders of a majority in aggregate principal amount of the subordinated notes to the proposed waiver of default under and amendment to the indenture governing the notes, availability of financing and other customary closing conditions. If any of the conditions are not satisfied, Bell Micro is not obligated to accept for payment, purchase or pay for, or may delay the acceptance for payment of, any tendered Notes, and may terminate the tender offer. Credit Suisse will act as the Dealer Manager for the tender offer for the Notes. Questions regarding the tender offer may be directed to: Credit Suisse Tel: (800) 820-1653 (toll-free) (212) 325-7596 Global Bondholder Services Corporation will act as the Information Agent for the tender offer for the subordinated notes. Requests for documents related to the tender offers may be directed to: Global Bondholder Services Corporation Information Agent Tel: (866) 736-2200 (toll free) (212) 430-3774 About Bell Microproducts Bell Microproducts Inc. (Nasdaq: BELM) -- http://www.bellmicro.com/-- is an international, value-added distributor of high-tech products, solutions and services, including storage systems, servers, software, computer components and peripherals, as well as maintenance and professional services. Bell is a Fortune 1000 company that has operations in Argentina, Brazil, Chile and Mexico. * * * As reported in the Troubled Company Reporter on Nov. 22, 2006, Bell Microproducts, Inc., received a Nasdaq Staff Determination notice stating that the company is not in compliance with the filing requirements for continued listing as set forth in Nasdaq Marketplace Rule 4310(c)(14). The company has also received notices of default from Wells Fargo Bank, N.A., with respect to its 3-3/4% Convertible Subordinated Notes due 2024 and its 3-3/4% Convertible Subordinated Notes, Series B due 2024 because of the delay in filing its Form 10-Q for the period ended Sept. 30, 2006. Wells Fargo serves as the trustee for the holders of the Notes. CALPINE CORP: Wants Court to OK Use of $258-Mil. Cash Collateral ---------------------------------------------------------------- Calpine Corp. and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York to approve an Agreed Order allowing for the use of $258 million of cash collateral to provide for the immediate and future transfer of Project Intercompany Loans, with the provision of additional security to CalGen's noteholders. The Debtors also ask the Court to approve the Agreed Order to their use unrestricted cash to make payments to Calpine's Unofficial Committee of Second Lien Debtholders of $100,262,269 in four equal installments of $25,065,567. Debtors Seek to Transfer $258-Mil. The Debtors have previously asked Wilmington Trust Company, as collateral agent of the Collateral Trust and Intercreditor Agreement, dated March 23, 2004, to transfer in accordance with the terms of the Cash Collateral Order, $258,000,000 of Excess Cash Flow to Calpine Corporation for purposes of an intercompany loan. The Collateral Agent disagreed with the Debtors' interpretation of the Cash Collateral Order's authorization of the transfers, and indicated that it would not grant Calpine Corp.'s transfer request. Through extensive negotiations to resolve the dispute, the Debtors; HSBC Bank USA, National Association, the successor indenture trustee to Wilmington Trust; Manufacturers Traders & Trust Company, successor indenture trustee to Wilmington; The Bank of Nova Scotia as Administrative Agent; and Morgan Stanley Senior Funding, Inc., as Administrative Agent, agreed to an order providing for the immediate and future transfer of Project Intercompany Loans, with the provision of additional security to CalGen's noteholders. The salient terms of the Agreed Order are: (1) The Collateral Agent will honor the transfer request for $258,000,000 immediately after the Court signs the Agreed Order. All future transfer requests or similar documents provided to the CalGen Parties with respect to Excess Cash Flow will also be honored after receipt, provided that at the time of request, the Debtors are in compliance with: -- their adequate protection obligations under the Agreed Order and the Cash Collateral Order; and -- certain provisions of the CalGen Indentures. (2) The proceeds from the sale of the assets of Goldendale Energy Center, LLC, will be included in future transfer requests; however, the proceeds of any other "Asset Sale" will not be included in future transfer requests absent further Court order. (3) As adequate protection to the CalGen Noteholders for any transfer of Excess Cash Flow to Calpine Corp., and the unlimited use of the cash by Calpine Corp. or any of its subsidiaries, CalGen will have: * a valid, enforceable, fully perfected first priority lien on the Excess Cash Flow transferred to the extent the Excess Cash Flow remains in a separate segregated account maintained by the Calpine Transferee; * an allowed claim against each of the Debtors under Sections 364(c)(1) and 507(b) of the Bankruptcy Code; and * a valid, enforceable, fully-perfected, silent, junior lien on all assets of each of the Debtors under Sections 364(c)(2) and 364(c)(3) securing the CalGen Reimbursement Claims. (4) The liens that were granted to the CalGen Noteholders under the Project Loan Documents will attach to the CalGen Replacement Liens and CalGen Reimbursement Claims without the need for any further or perfection. Richard M. Cieri, Esq., at Kirkland & Ellis LLP, in New York, contends that the Agreed Order is necessary for the Debtors to access significant sums of Excess Cash Flow at CalGen for the purpose of maintaining Calpine Corp.'s liquidity and satisfying its working capital and operational needs. Debtors Want to Pay Second Lien Holders The Debtors, the Official Committee of Unsecured Creditors and the Unofficial Committee of Second Lien Debtholders of Calpine have until Dec. 31, 2006, to agree on future adequate protection payments to the Calpine Second Lien Holders. Accordingly, the parties, including the Official Committee of Equity Security Holders, agreed that: (a) The Debtors will not be required to draw on the $1,000,000,000 revolving credit facility to make adequate protection payments to the Calpine Second Lien Holders but will be required to use their unrestricted cash to make payments, subject to a $10,000,000 cushion. Provided there has been no default or event of default under the DIP Facility and subject to the Net Corporate Liquidity Requirement, the Debtors will pay the Calpine Second Lien Holders $100,262,269 in four equal installments of $25,065,567 each on: * March 31, 2007, * June 30, 2007, * Sept. 30, 2007, and * Dec. 31, 2007. To the extent that any Quarterly Payment is not paid in full on account of the Net Corporate Liquidity Requirements, the unpaid balance will carry over and be added to the next Quarterly Payment. (b) The Debtors will also make payments to the Calpine Second Lien Holders on these dates: Payment Date Amounts ------------ ------- Jan. 15, 2007 $88,250,000 June 1, 2007 $19,750,000 July 15,2007 $88,250,000 Dec. 1,2007 $19,750,000 If the Debtors fail to make a 2007 Adequate Protection Payment in full on account of the Net Corporate Liquidity Requirement, the unpaid balance will carry over and be added to the next 2007 Adequate Protection Payment. (c) In exchange for the payments, the Calpine Second Lien Holders will waive certain claims for or entitlement to default interest or interest on interest. If the adequate protection payments to the Calpine Second Lien Holders are ultimately recharacterized as a payment of principal, the Calpine Second Lien Holders agree to waive any claim for or entitlement to any make-whole amount or any prepayment penalty as to the portion of the recharacterized payments. (d) If the Debtors fail to pay the 2006 Adequate Protection Amount or 2007 Adequate Protection Amount by when due, the Second Lien Committee may terminate their adequate protection arrangement under the Cash Collateral Order after giving five business days' advanced notice to the Debtors, and the Creditors and Equity Committees. (e) The effectiveness of the Agreed Order is subject to the Debtors' obtaining the consent of lenders under the DIP Facility. Prior to any effectiveness, the parties reserve their rights to confirm the calculations used to derive the amounts of the adequate protection payments contemplated by the Agreed Order. About Calpine Corp. Headquartered in San Jose, California, Calpine Corporation (OTC Pink Sheets: CPNLQ) -- http://www.calpine.com/-- supplies customers and communities with electricity from clean, efficient, natural gas-fired and geothermal power plants. Calpine owns, leases and operates integrated systems of plants in 21 U.S. states and in three Canadian provinces. Its customized products and services include wholesale and retail electricity, gas turbine components and services, energy management and a wide range of power plant engineering, construction and maintenance and operational services. The company previously produced a portion of its fuel consumption requirements from its own natural gas reserves. However, in July 2005, the company sold substantially all of its remaining domestic oil and gas assets to Rosetta Resources Inc. The company filed for chapter 11 protection on Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G. Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their restructuring efforts. Michael S. Stamer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors. As of Dec. 19, 2005, the Debtors listed $26,628,755,663 in total assets and $22,535,577,121 in total liabilities. (Calpine Bankruptcy News, Issue No. 33; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) CALPINE CORP: Goldendale Facility Auction Scheduled on February 5 ----------------------------------------------------------------- The Hon. Burton R. Lifland of the U.S. Bankruptcy Court for the Southern District of New York approved bidding procedures that will govern the sale of Calpine Corp. and its debtor-affiliates' Goldendale Facility located in south-central Washington. An auction will be held on Feb. 5, 2007, at the offices of Kirkland & Ellis LLP, at the Citigroup Center, 153 East 53rd Street, in New York. A hearing to consider the sale of the Goldendale Facility is scheduled for Feb. 7, 2007 at 10:00 a.m. Any counterparty to an Assigned Contract that wishes to obtain adequate assurance information regarding other bidders that will or may participate at the Auction must notify Debtors Goldendale Energy Center, LLC, in writing, on or before Jan. 15, 2007, at: c/o Kelly K. Frazier Kirkland & Ellis LLP 777 South Figueroa Street Los Angeles, CA 90017 If a counterparty to an Assigned Contract does not properly object to the applicable Cure Amounts and adequate assurance of future performance by Puget Sound Energy, Inc., on or before Jan. 29, 2007, the Court will deem the actual Cure Amount payable and forever bar the counterparty from objecting to adequate assurance of future performance from PSE or any other successful bidder. A counterparty to an Assigned Contract that timely submits a Request for Adequate Assurance will have until 5:00 p.m. on Feb. 2, 2007, by which to file an objection to adequate assurance of future performance by other bidders. About Calpine Corp. Headquartered in San Jose, California, Calpine Corporation (OTC Pink Sheets: CPNLQ) -- http://www.calpine.com/-- supplies customers and communities with electricity from clean, efficient, natural gas-fired and geothermal power plants. Calpine owns, leases and operates integrated systems of plants in 21 U.S. states and in three Canadian provinces. Its customized products and services include wholesale and retail electricity, gas turbine components and services, energy management and a wide range of power plant engineering, construction and maintenance and operational services. The company previously produced a portion of its fuel consumption requirements from its own natural gas reserves. However, in July 2005, the company sold substantially all of its remaining domestic oil and gas assets to Rosetta Resources Inc. The company filed for chapter 11 protection on Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G. Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their restructuring efforts. Michael S. Stamer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors. As of Dec. 19, 2005, the Debtors listed $26,628,755,663 in total assets and $22,535,577,121 in total liabilities. (Calpine Bankruptcy News, Issue No. 33; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) CALPINE CORP: Wants to Effectuate CDN$660MM Greenfield Financing ---------------------------------------------------------------- Calpine Corp. and its debtor-affiliates seek permission from the U.S. Bankruptcy Court for the Southern District of New York to: (a) take all actions and execute all documents necessary to effectuate a Greenfield Financing Transaction, and other related transactions with respect to the Greenfield Partnership; (b) permit Greenfield Commercial Trust to establish a new, wholly owned subsidiary and transfer its 49.995% limited partner interest in the Greenfield Partnership to the newly created subsidiary; and (c) assume, amend, and assign or otherwise transfer to the Greenfield Partnership the Siemens Agreement whether directly or through a series of transactions with Debtor and non-Debtor subsidiaries of Calpine Corporation. Debtors Enter into Additional Financing In July 2006, the Debtors caused non-debtor Blue Spruce Energy Center, LLC, to transfer three Siemens Westinghouse generators and other equipment to Greenfield Energy Centre, LP. In August 2006, the Court authorized the Debtors to make capital contributions of up to $45,000,000 to Greenfield Energy Centre, LP, during the remainder of 2006 or risk the dilution of Calpine Corporation's 50% ownership interest in the Greenfield Facility. After several months of negotiations, the Greenfield Partnership -- Canadian debtor Calpine Energy Services Canada, Ltd., and MIT Power Canada Investment, Inc., a subsidiary of Mitsui & Co., Ltd. -- entered into a financing transaction with the Bank of Montreal and the Bank of Tokyo-Mitsubishi UFJ, Ltd. The Greenfield Financing Transaction contemplates: (1) a non-recourse term loan for up to CDN$565,000,000, (2) the issuance of a CDN$50,250,000 letter of credit to secure the Greenfield Partnership's obligations under the Ontario Power Authority power purchase agreement, and (3) a CDN$45,000,000 working capital facility for collateral needs to buy fuel for the Greenfield Plant and general working capital needs. David R. Seligman, Esq., at Kirkland & Ellis LLP, in New York, said the amended Siemens Agreement would increase the contract liability cap and provide for liquidated damages payable by Siemens Power Generation, Inc., in case of a delay in performance testing. To prevent dilution of its ownership interests in the Greenfield Partnership below 50%, Calpine Corp. is obligated to assign or transfer the Siemens Agreement, as amended, to the Greenfield Partnership. To effectuate the Greenfield Financial Transaction, the Lenders sought ratification of prepetition transfer of Calpine Corp.'s equipment to the Greenfield Partnership. Hence, the Debtors also asked the Court to ratify prepetition transfers of certain equipment and related assets from Calpine Corp. to the Greenfield Partnership. "The Greenfield Financing Transaction will provide the additional non-recourse financing necessary to complete construction of the Greenfield Plant . . . Moreover, the Greenfield Financing Transaction does not require any cash infusions from the Debtors," Mr. Seligman asserted. Mr. Seligman adds that establishing a new, wholly owned subsidiary transferring Greenfield Commercial Trust's ownership interest in the Greenfield Partnership would provide tax advantages relating that would not otherwise be available. The transaction likely would increase the overall value of Calpine's ownership interest in the Greenfield Plant for the benefit of the Debtors and their estates," Mr. Seligman said. About Calpine Corp. Headquartered in San Jose, California, Calpine Corporation (OTC Pink Sheets: CPNLQ) -- http://www.calpine.com/-- supplies customers and communities with electricity from clean, efficient, natural gas-fired and geothermal power plants. Calpine owns, leases and operates integrated systems of plants in 21 U.S. states and in three Canadian provinces. Its customized products and services include wholesale and retail electricity, gas turbine components and services, energy management and a wide range of power plant engineering, construction and maintenance and operational services. The company previously produced a portion of its fuel consumption requirements from its own natural gas reserves. However, in July 2005, the company sold substantially all of its remaining domestic oil and gas assets to Rosetta Resources Inc. The company filed for chapter 11 protection on Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G. Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their restructuring efforts. Michael S. Stamer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors. As of Dec. 19, 2005, the Debtors listed $26,628,755,663 in total assets and $22,535,577,121 in total liabilities. (Calpine Bankruptcy News, Issue No. 33; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) CAMPUS CREST: Case Summary & Five Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Campus Crest Properties, LLC 6902 Ford Drive Northwest Gig Harbor, WA 98335 Bankruptcy Case No.: 06-14451 Chapter 11 Petition Date: December 14, 2006 Court: Western District of Washington (Seattle) Judge: Karen A. Overstreet Debtor's Counsel: James L. Day, Esq. Bush Strout & Kornfeld 601 Union Street, Suite 5500 Seattle, WA 98101-2373 Tel: (206) 292-2110 Fax: (206) 292-2104 Total Assets: $10,831,873 Total Debts: $9,114,627 Debtor's Five Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Corr Cronin Michelson et al. $24,300 1001 4th Avenue, Suite 3900 Seattle, WA 98154-1051 Jaeger Engineering $11,340 9419 South 204 Place Kent, WA 98031 Centre Point Surveying, Inc. P.S. $3,534 P.O. Box 4416 Federal Way, WA 98063-4416 Pacific Mobile Structures $340 P.O. Box 1404 Chehalis, WA 98532-0350 National Construction Rentals $176 P.O. Box 4503 Pacoima, CA 91333-4503 CAPITAL AUTO: DBRS Places $15-Million Class D Notes' Rating at BB ----------------------------------------------------------------- Dominion Bond Rating Service finalized the ratings of the Capital Auto Receivables Asset Trust 2006-2 transaction as noted below. Assigned ratings to Class D notes. -- $750,000,000 Asset Backed Notes, Class A-1 rated at R-1 (high) -- $350,000,000 Asset Backed Notes, Class A-2a rated at AAA -- $698,000,000 Asset Backed Notes, Class A-2b rated at AAA -- $400,000,000 Asset Backed Notes, Class A-3a rated at AAA -- $617,690,000 Asset Backed Notes, Class A-3b rated at AAA -- $102,224,000 Asset Backed Notes, Class B rated at A (high) -- $57,125,000 Asset Backed Notes, Class C rated at BBB -- $15,033,000 Asset Backed Notes, Class D rated at BB The ratings reflect the ability of the credit enhancement within the transaction structure to withstand significant stresses relative to base case losses and prepayment speeds, as appropriate for the rating category. The ratings on the notes do not address the likelihood or frequency of prepayments on the underlying loans or the possibility that a holder of the notes might realize a lower than anticipated yield. CENTRAL VERMONT: VPS Board Approves 4.07% Rate Increase ------------------------------------------------------- Central Vermont Public Service disclosed that the Vermont Public Service Board has approved a 4.07% rate increase for the company's customers, effective for service rendered January 1. "Even with the increase, we believe CVPS will have the lowest rates of any major utility in New England," Bob Young, president, said. The bill of a residential customer using 500 kilowatt-hours per month will increase from $68.01 to $70.78. The same customer would pay up to $106.90 elsewhere in New England, the company also disclosed. As reported in the Troubled Company Reporter on Nov. 14, 2006 CVPS and the Vermont Department of Public Service filed an agreement with the Vermont Public Service Board to recover incremental replacement power costs associated with a scheduled Vermont Yankee refueling outage in 2005. A full text-copy of the Public Service Borad order may be viewed at no charge at http://ResearchArchives.com/t/s?1700 Founded in 1929, Central Vermont Public Service (NYSE: CV) is Vermont's largest electric utility. Central Vermont's non- regulated subsidiary, Eversant Corporation, sells and rents electric water heaters through a subsidiary, SmartEnergy Water Heating Services. Deloitte & Touche LLP in Boston, Massachusetts, issued an adverse opinion on the effectiveness of Central Vermont Public Service Corporation's internal control over financial reporting because of material weaknesses. * * * As reported in the Troubled Company reporter on Aug. 4, 2006, Standard & Poor's Ratings Services affirmed its 'BB+' corporate credit rating and 'BBB' senior secured bond rating on electric utility Central Vermont Public Service Corp. At the same time, the preferred stock rating was lowered to 'B+' from 'BB-'. The outlook is stable. CLIENTLOGIC CORP: Revised Merger Plan Cues Moody's Rating Review ---------------------------------------------------------------- Moody's Investors Service placed ClientLogic Corporation's B3 corporate family rating on review for possible upgrade after the company's disclosure of its revised plan to merge with Sitel Corporation and Sitel's recent return to filing timely financial statements with the SEC. As part of its review, Moody's will focus on resolution of the company's merger plan, including the combined firm's prospective capitalization, client contract performance, expense reduction, and free cash flow. Under the terms of the proposed merger, a newly formed subsidiary of ClientLogic will merge with SITEL and pay $4.25 per share in cash for all of the outstanding common stock of SITEL. The transaction, which ClientLogic expects to be completed in the first quarter of 2007, is subject to customary closing conditions, including shareholder approval and regulatory clearances. In connection with the proposed merger, SITEL has set Jan. 12, 2007 as the date of its 2006 Annual Meeting of Stockholders at which SITEL will seek, among other things, stockholder approval of the merger. Headquartered in Nashville, Tennessee, ClientLogic Corporation provides outsourced call center services worldwide. CONTINENTAL AIRLINES: Schedules $292-Mil. 4th Qtr. Debt Payments ---------------------------------------------------------------- Continental Airlines Inc. disclosed that its scheduled debt and capital lease principal payments for the fourth quarter 2006 are estimated to be approximately $292 million. The company also disclosed that it had hedged, as of December 11, approximately 36% of its projected fuel requirements for the fourth quarter, using petroleum swap contracts, with a weighted average price of $72.36 per barrel, and another 3% with zero cost collars on jet fuel. The company had also hedged about 18% of its projected fuel requirements for the first quarter 2007, using petroleum swap contracts with a weighted average price of $67.46, and another 8% with zero cost collars on heating oil. Fourth Quarter Outlook The company expects to record income of approximately $26 million for the full year 2006 related to the tax sharing agreement with ExpressJet. Pension plans contributions of the company totaled $246 million and estimates its non-cash pension expense will be approximately $159 million for calendar year 2006, which excludes year-to-date settlement charges of $37 million related to lump-sum distributions from the pilot's frozen defined benefit plan. The company also expects to record stock option expense of $6 million for the fourth quarter and $26 million for the full year 2006. Cargo, mail and other revenue is estimated by the company to be between $280 million and $290 million for the fourth quarter 2006. The company further disclosed that it anticipates ending the year 2006 with an unrestricted cash and short-term investments balance of between $2.4 and $2.5 billion. Continental Airlines Inc. (NYSE: CAL) -- http://continental.com/ -- is the world's fifth largest airline. Continental, together with Continental Express and Continental Connection, has more than 3,200 daily departures throughout the Americas, Europe and Asia, serving 154 domestic and 138 international destinations. More than 400 additional points are served via SkyTeam alliance airlines. With more than 43,000 employees, Continental has hubs serving New York, Houston, Cleveland and Guam, and together with Continental Express, carries approximately 61 million passengers per year. Continental consistently earns awards and critical acclaim for both its operation and its corporate culture. * * * As reported in the Troubled Company Reporter on Nov. 10, 2006 Moody's Investors Service assigned ratings of Caa1, LDG5-75% to the $200 million of senior unsecured notes issued by Continental Airlines Inc.'s. Moody's affirmed the B3 corporate family rating. The outlook is stable. As reported in the Troubled Company Reporter on Oct. 23, 2006, Standard & Poor's Ratings Services affirmed its ratings, including the 'B' long-term and 'B-3' short-term corporate credit ratings, on Continental Airlines Inc. The outlook is revised to stable from negative. Continental has about $17 billion of debt and leases. At the same time, Fitch Ratings has upgraded Continental Airlines Inc.'s Issuer Default Rating to 'B-' from 'CCC' and Senior Unsecured Debt to 'CCC/RR6' from 'CC/RR6'. Rating outlook was stable. COUDERT BROTHERS: Seeks Extension of Excl. Plan-Filing Period ------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York will convene a hearing at 10:00 a.m., on Dec. 20, 2006, to consider Coudert Brothers LLP's request to extend its exclusive periods to file a Plan of Reorganization and solicit acceptances of that Plan. The Debtor wants the Court to extend until May 20, 2007, its exclusive plan-filing period; and until July 19, 2007, its period to solicit plan acceptances. Tracy L. Klestadt, Esq., at Klestadt & Winters, LLP, tells the Court that the Debtor's prepetition status as a multi-national law firm creates numerous unique complexities that must be confronted prior to creation a plan of liquidation. These include: a) determining the proper procedures for destruction or on- going retention of years of client's legal records and documents in storage; b) developing procedures to notify Coudert's previous clients of its pending liquidation and disposition of client files; c) preparing for and litigating malpractice suits currently pending against Coudert in other courts around the country; d) litigating in foreign jurisdictions to reclaim assets that were wrongfully removed or converted from the estate; and e) liquidating any remaining receivables and assets located in both domestic and foreign jurisdictions. The Debtor argues that the sheer scope of these pending collection and malpractice actions, as well as the inherent delay in prosecuting and defending them in various forums, warrant the extension of the exclusive periods. Coudert Brothers LLP was an international law firm specializing in complex cross border transactions and dispute resolution. The Debtor filed for Chapter 11 protection on Sept. 22, 2006 (Bankr. S.D.N.Y. Case No. 06-12226). John E. Jureller, Jr., Esq., and Tracy L. Klestadt, Esq., at Klestadt & Winters, LLP, represents the Debtor in its restructuring efforts. In its schedules of assets and debts, Coudert listed total assets of US$29,968,033 and total debts of US$18,261,380. The Debtor's exclusive period to file a chapter 11 plan expires on Jan. 20, 2007. The firm had operations in Australia and China. CROWN CASTLE: Moody's Withdraws Ratings Following Debt Repayment ---------------------------------------------------------------- Moody's Investors Service withdrew all ratings of Crown Castle Operating Company as all rated debt has been repaid with proceeds from its $1.55 billion offering of senior secured tower revenue notes. Outlook Actions: * Issuer: Crown Castle Operating Company -- Outlook, Changed To Rating Withdrawn From Stable Withdrawals: * Issuer: Crown Castle Operating Company -- Speculative Grade Liquidity Rating, Withdrawn, previously rated SGL-2 -- Corporate Family Rating, Withdrawn, previously rated B1 Based in Houston, Crown Castle Operating Company owns and operators communication towers and is a subsidiary of Crown Castle International Corp. CSC HOLDINGS: 6-3/4% Notes' Exchange Offer Extended Until Jan. 16 ----------------------------------------------------------------- CSC Holdings Inc. will extend until Jan. 16, 2007, at 5:00 p.m., (New York City time) its offer to exchange up to $500 million aggregate principal amount of its 6-3/4% Senior Notes due 2012, which were initially issued and sold in a private placement in April 2004, for an equal aggregate amount of its registered 6-3/4% Series B Senior Notes due 2012. Prior to this extension, the exchange offer was scheduled to expire at 5:00 p.m., New York City time, on Dec. 15, 2006. As of Dec. 12, 2006, $395,770,000 of the old notes had been tendered for exchange. Except for the extension of the expiration date, all of the other terms of the exchange offer remain as set forth in the exchange offer prospectus dated July 18, 2006. Headquartered in New York, CSC Holdings Inc. is a subsidiary of Cablevision Systems Corporation is a domestic cable multiple system operator serving more than 3 million subscribers in and around the metropolitan New York area. * * * Moody's Investors Service placed ratings on CSC Holdings Inc.'s Senior Secured Bank Credit Facility, currently at Ba2 and Senior Unsecured Regular Bond/Debenture, currently at B2, on review for downgrade following the Dolan family's announcement of a proposal to acquire Cablevision. DOLLAR GENERAL: Posts $5.285MM Net Loss in Quarter Ended Nov. 3 --------------------------------------------------------------- Dollar General Corporation reported a $5.285 million net loss for the third fiscal quarter ended Nov. 3, 2006, after recognizing pre-tax costs and charges in the quarter of approximately $79.2 million relating to the elimination of its pack-away inventory model and planned store closings. Net income for the prior year quarter ended Oct. 28, 2005, was $64.425 million. Net sales for the fiscal 2006 third quarter were $2.21 billion, a 7.6% increase over net sales of $2.06 billion for the fiscal 2005 third quarter. The sales increase is largely attributable to increased sales of highly consumables and, to a lesser extent, increased sales of seasonal merchandise. It includes the sales from 430 net new stores and a same-store sales increase of 2%. As a percentage of sales, gross profit for the fiscal 2006 third quarter was 23.8% compared with 28.1% for the fiscal 2005 third quarter. Gross profit was reduced in the 2006 third quarter by below-cost inventory adjustments of approximately $63.5 million relating to the company's recent decision to eliminate pack-away inventory by the end of fiscal 2007 and $7.8 million relating to inventory in stores the company plans to close, outside of the ordinary course of business, in 2007. The amount of the below-cost inventory adjustments is based on management's assumptions regarding the timing and adequacy of markdowns and the final adjustment may vary materially from the amount recorded depending on various factors, including timing of the plan's execution, the accuracy of assumptions used by management in developing these estimates, and retail market conditions. In addition to these charges, the gross profit rate was negatively impacted by a greater sales mix of lower-margin merchandise, a decrease in markups on purchases, more promotional markdowns, and higher inventory shrink. Selling, general, and administrative expenses were 23.6% of sales in the third quarter of fiscal 2006 versus 23.2% of sales in the fiscal 2005 third quarter. The increase in SG&A reflects impairment charges on leasehold improvements and fixtures of approximately $8 million relating to planned store closings outside of the ordinary course of business. Other expenses contributing to the increase in SG&A (as a percent of sales) were store labor due to additional labor associated with various store initiatives, store occupancy costs due primarily to higher store rental rates, and administrative salaries, resulting from additions to the company's leadership and the reorganization of the merchandising and real estate teams, as well as the expensing of stock options. These increases were partially offset by proceeds of $7.9 million related to the final settlement of the company's Hurricane Katrina insurance claim. Interest expense, net of interest income, for the fiscal 2006 third quarter increased $6.4 million over the prior year quarter due to higher net borrowings and an increase in income tax-related interest of $3.2 million. The increase in tax-related interest expense is due in part to reductions in interest expense in the prior year period pertaining to the resolution of certain income tax-related contingencies. For the 39-week year-to-date period, net income was $87.9 million compared with $204.9 million in the comparable fiscal 2005 period. Year-to-date net sales increased 8.4% including a same-store sales increase of 2.3%. The company's gross profit rate to sales was 26% in the 2006 year- to-date period compared with 28.4% in the 2005 year-to-date period. In addition to the below-cost inventory adjustments, the decrease in the gross profit rate was impacted by lower markups on purchases during the period, increased promotional markdowns, a higher sales mix of lower-margin merchandise, higher inventory shrink, and higher transportation expenses primarily attributable to increased fuel costs. These factors were partially offset by higher average markups on beginning inventory in the 2006 period as compared with the 2005 period. Year-to-date, the company's inventory shrink rate was 3.38% in 2006 compared with 3.20% in 2005. SG&A for the fiscal 2006 year-to-date period was 23.5% of sales compared with 23% in 2005. In addition to the $8 million of asset impairment charges, SG&A was impacted by increased advertising, store occupancy costs, and administrative salaries. These increases were partially offset by proceeds of $13 million related to the settlement of hurricane-related insurance claims. The Company's effective income tax rate for the fiscal 2006 39- week period was 38.6% compared with 35.5% in the 2005 period. The increase in the effective income tax rate is a result of: -- a tax law change in the 2006 period that reduced previously recorded deferred tax assets related to the company's operations in the state of Texas, -- the non-recurrence in the 2006 period of benefits realized in the 2005 period related to an internal corporate restructuring, -- an increase in a deferred tax valuation allowance in the 2006 period due to revised estimates regarding the company's ability to utilize certain state income tax credit carry forwards prior to their expiration, and -- a reduction in income tax reserves in the 2005 period (due principally to the expiration of the statute of limitations) that did not reoccur in the 2006 period. Inventory The Company's inventory balance, after the $71.2 million below- cost markdowns, increased 6.4% in total and was flat on a per square footage basis as compared to the prior year third quarter. The Company made substantial progress in its efforts to sell through the higher than anticipated level of highly consumable promotional inventory held at the end of the company's 2006 second fiscal quarter. With regard to the current holiday season, the company has taken measures to ensure that its stores are better prepared and seasonal inventories are better managed than in the prior year. Holiday-related sales to date, which reflect the results of a holiday circular, are positive, although the company's outlook remains cautious in the highly competitive retail environment. At Nov. 3, 2006, the company's balance sheet showed $3.206 billion in total assets, $1.503 billion in total liabilities, and $1.703 billion in total stockholders' equity. Full-text copies of the company's third fiscal quarter financials are available for free at http://ResearchArchives.com/t/s?171b Goodlettsville, Tenn.-based Dollar General Corp. (NYSE: DG) -- http://www.dollargeneral.com/-- is a Fortune 500(R) discount retailer with 8,276 neighborhood stores as of Nov. 24, 2006. Dollar General stores offer convenience and value to customers by offering consumable basic items that are frequently used and replenished, such as food, snacks, health and beauty aids, and cleaning supplies, as well as a selection of basic apparel, house wares, and seasonal items at everyday low prices. * * * Moody's Investors Service confirmed Dollar General Corp.'s Ba1 corporate family rating and downgraded its Ba1 rating on the company's $200 million 8-5/8% senior unsecured notes to Ba2 in connection with the rating agency's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology. DURA AUTOMOTIVE: Eight Vendors Want to Reclaim Prepetition Goods ---------------------------------------------------------------- Eight vendors ask DURA Automotive Systems Inc., pursuant to Sections 503 and 546 of the Bankruptcy Code and applicable non- bankruptcy law, to return certain goods that are subject to reclamation: Vendor Value of Goods ------ -------------- Freedom Technologies Corp. $164,576 S&S Porcelain Metals, LLC 144,449 Dexon Computer, Inc. 23,930 Sharon Tube Company 40,148 Metco Industries, Inc. 54,065 Steadfast Engineered Products, LLC 15,531 ACK Controls Inc. 169,260 Supreme Machined Products Co., Inc. of Spring Lake, Michigan 23,391 The Vendors inform the Honorable Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware that the reclaimed goods were sold in the ordinary course of their businesses and delivered to the Debtors during the 45 days before they filed for bankruptcy. The Vendors believe that the Debtors were insolvent at the time that they received the goods. Steadfast Engineered Products requests for an inventory of the goods it delivered to the Debtors. Rochester Hills, Mich.-based DURA Automotive Systems, Inc. (Nasdaq: DRRA) -- http://www.DURAauto.com/-- is an independent designer and manufacturer of driver control systems, seating control systems, glass systems, engineered assemblies, structural door modules and exterior trim systems for the global automotive industry. The company is also a supplier of similar products to the recreation vehicle and specialty vehicle industries. DURA sells its automotive products to North American, Japanese and European original equipment manufacturers and other automotive suppliers. The Debtors filed for chapter 11 petition on October 30, 2006 (Bankr. District of Delaware Case No. 06-11202). Richard M. Cieri, Esq., Marc Kieselstein, Esq., Roger James Higgins, Esq., and Ryan Blaine Bennett, Esq., of Kirkland & Ellis LLP are lead counsel for the Debtors' bankruptcy proceedings. Mark D. Collins, Esq., Daniel J. DeFranseschi, Esq., and Jason M. Madron, Esq., of Richards Layton & Finger, P.A. Attorneys are the Debtors' co-counsel. Baker & McKenzie acts as the Debtors' special counsel. Togut, Segal & Segal LLP is the Debtors' conflicts counsel. Miller Buckfire & Co., LLC is the Debtors' investment banker. Glass & Associates Inc., gives financial advice to the Debtor. Kurtzman Carson Consultants LLC handles the notice, claims and balloting for the Debtors and Brunswick Group LLC acts as their Corporate Communications Consultants for the Debtors. As of July 2, 2006, the Debtor had $1,993,178,000 in total assets and $1,730,758,000 in total liabilities. (Dura Automotive Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ENERSIS SA: Moody's Lifts Sr. Debt Ratings to Baa3 from Ba1 ----------------------------------------------------------- Moody's Investors Service upgraded the senior unsecured debt ratings of Enersis S.A., and Empresa Nacional de Electricidad, S.A. to Baa3 from Ba1 with a stable outlook. The rating action is prompted by a number of credit considerations. The financial performance of both Enersis and Endesa Chile has improved markedly over the last two years as a result of improvements in the regulatory framework and increased demand for electricity in the countries in which the companies operate: Chile, Colombia, Peru, Brazil and Argentina. Moody's notes that cash flow from operations to debt improved from 14.8% in 2004 to 22.4% in 2005 and 28.8% for the last twelve months as of September, 2006 for Enersis and from 9.8% in 2004 to 15.4% in 2005 and 18% for the last twelve months as of September, 2006 for Endesa Chile. At the same time Debt to EBITDA decreased from 3.5 times in 2004 to 2.9x in 2005 and 1.7x for the last twelve months as of September, 2006 for Enersis and from 4.2 times in 2004 to 3.4x in 2005 and 2.4x for the last twelve months as of September 2006 for Endesa Chile. In addition to improvements in financial performance, the two companies have improved their liquidity through recent executions of favorable bank facilities. Amendments to the Electricity Law have established more favorable operating conditions in Chile for the electricity sector. The Short Law 1 provides more clarity with respect to the sharing of transmission costs between generation companies and end-users and tightens the node price band to within 5% of average unregulated long term contracts thereby more closely linking regulated and unregulated power prices. It also establishes a Board of Experts to help arbitrate conflicts within the Chilean electric industry. The Short Law 2 relaxed the six-month node price adjustment model by allowing higher node price resets during periods when average unregulated long term contract prices and the theoretical cost of the system diverges more than 30% as it has since the Argentine natural gas delivery restrictions were put into place. The Short Law 2 also allows generation companies to sign long term contracts with distribution companies for up to 15 years beginning in 2008/2010 at a fixed price up to 30% above the current node prices. Short Laws 1 and 2 have created structural changes in Chile's electricity model that directly benefit Enersis and Endesa as the largest participants in the Chilean electricity market. In addition to the structural changes in the regulatory framework, Chile and the countries in which Enersis and Endesa Chile operate have experienced stronger demand electricity demand growth since 2003 averaging about 5% among Chile, Argentina, Brazil, Colombia and Peru, with the strongest demand growth in Chile at almost 8% in 2005. This growth in demand reflects continuing macroeconomic improvements in the five countries in which Enersis and Endesa Chile operate. Notably, Chile's government bond ratings were upgraded recently to A1 and A2 while Brazil's government rating was upgraded to Ba2 and the outlook for Peru's government ratings -- Ba3 and Baa3 have been changed to positive. With total installed capacity of 12,228 MW and over 11 million distribution customers in the five countries in which Enersis and Endesa Chile operate, both companies stand to benefit from continuing improvements in the regional economies. The ratings upgrades are also acknowledge improvements in the management of the liquidity position of both companies including sufficient protection from fluctuations in funding availability due to market conditions. Both companies have executed similar committed credit facilities with favorable terms. The bank facilities are three year revolvers that are not subject to any material adverse effect clauses. Any draws on the facilities can be repaid at facility maturity. Moody's assignment of investment grade ratings assumes that future liquidity facilities will also not be subject to MAE clauses and will continue to provide financial flexibility consistent with other investment grade companies globally. Based in Santiago, Chile, Enersis is owned 61% by Endesa Spain, one of the largest integrated Spanish utilities in the world. Endesa Chile, the largest electric generation company in Chile, is owned 60% by Enersis. ENTERGY NEW ORLEANS: Panel Asserts Illegal Postpetition Payments ---------------------------------------------------------------- The Official Committee of Unsecured Creditors alleges that Entergy New Orleans, Inc., made certain unauthorized postpetition payments to Entergy Power, Inc., Entergy Gulf States, Inc., Entergy Arkansas, Inc., and System Energy Resources, Inc., on account of alleged prepetition obligations to the Entergy Affiliates. The unauthorized payments are: Affiliate Payment Date Amount --------- ------------ ------ Entergy Arkansas 09/29/2005 $2,575,295 10/24/2005 2,593,303 11/16/2005 1,652,584 ----------- $6,821,182 Entergy Gulf States 09/29/2005 $1,865,660 10/24/2005 1,900,441 11/16/2005 1,255,887 ----------- $5,021,988 Entergy Power 09/29/2005 $724,908 10/24/2005 366,564 ----------- $1,091,471 System Energy 10/24/2005 $6,174,219 ----------- Total Payments $19,108,860 =========== Philip K. Jones, at Liskow & Lewis, APLC, in New Orleans, Louisiana, contends that the Affiliate Payments were unlawful because they were never authorized by the Court and are also not allowed under the Bankruptcy Code. He relates that due to the unauthorized payments ENOI suffered a needless insufficiency of funds to pay its authorized costs and expenses during the postpetition period. Mr. Jones says that because of the Affiliate Payments, ENOI was forced to borrow funds under its DIP financing agreement with Entergy Corp., leading to ENOI's incurrence of additional interest costs in favor of and payable to Entergy Corp. According to the Committee, the total interest costs is $1,019,196 through Oct. 26, 2006. The Committee asserts that ENOI is entitled to judgment avoiding the transfers pursuant to Section 549 of the Bankruptcy Code, and that each of the Entergy Affiliates should return to ENOI the principal amount of the Affiliate Payments. Accordingly, the Committee asks the Court to rule in favor of ENOI avoiding the Affiliate Payments. The Committee further asks the Court to direct the Entergy Affiliates to return to the bankruptcy estate the principal amounts constituting the Affiliate Payments, and to reimburse ENOI's bankruptcy estate for the precise amount of interest incurred by ENOI to finance the unauthorized payments. Headquartered in Baton Rouge, Louisiana, Entergy New Orleans Inc. -- http://www.entergy-neworleans.com/-- is a wholly owned subsidiary of Entergy Corporation. Entergy New Orleans provides electric and natural gas service to approximately 190,000 electric and 147,000 gas customers within the city of New Orleans. Entergy New Orleans is the smallest of Entergy Corporation's five utility companies and represents about 7% of the consolidated revenues and 3% of its consolidated earnings in 2004. Neither Entergy Corporation nor any of Entergy's other utility and non-utility subsidiaries were included in Entergy New Orleans' bankruptcy filing. Entergy New Orleans filed for chapter 11 protection on Sept. 23, 2005 (Bankr. E.D. La. Case No. 05-17697). Elizabeth J. Futrell, Esq., and R. Partick Vance, Esq., at Jones, Walker, Waechter, Poitevent, Carrere & Denegre, L.L.P., represent the Debtor in its restructuring efforts. Carey L. Menasco, Esq., Philip Kirkpatrick Jones, Jr., Esq., and Joseph P. Hebert, Esq., at Liskow & Lewis, APLC, represent the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed total assets of $703,197,000 and total debts of $610,421,000. (Entergy New Orleans Bankruptcy News, Issue No. 30; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) ENTERGY NEW: Judge LeMelle Refers Hibernia Action to Bankr. Court ----------------------------------------------------------------- Capital One, N.A., formerly known as Hibernia National Bank, asked Judge Brown for a declaratory judgment against Entergy New Orleans, Inc.; Entergy Services, Inc.; and Entergy Corporation that certain funds sent by ESI or Entergy Corp. to an ENOI account were earmarked to cover the negative balance in the account and do not constitute property of the estate, as published in the Troubled Company Reporter on July 7, 2006. District Judge Ivan L.R. LeMelle held that the civil action is related to ENOI's Chapter 11 case pending before the U.S. Bankruptcy Court for the Eastern District of Louisiana. Pursuant to 28 U.S.C. Section 1452, Judge LeMelle referred the civil action to the Bankruptcy Court in November 2006. Capital One amended the Complaint in August 2006 to drag four more Entergy Corp. affiliates -- Entergy Arkansas, Inc.; Entergy Mississippi, Inc.; Entergy Operations, Inc.; and System Energy Resources, Inc. Before the Debtor filed for bankruptcy, Capital One debited the Debtor's Remittance Processing Center account for a $15,057,050 loan, resulting in a $13,623,873 negative account balance. Capital One decided to reverse the debit to the RPC account and informed the Entergy Entities one day before ENOI's Petition Date. In response to the negative balance in the RPC account, ESI sent $13,548,000 that day to the Debtor's General Fund account to cover the negative balance, resulting in the GF account containing $13,604,271. ESI and Entergy Corp. stated to Capital One that ESI sent the funds only to cover the negative balance in the RPC account. Prior to that, Capital One assumed that ESI had decided for other reasons to transfer ownership of the funds to ENOI. Capital One has argued that if ESI or Entergy Corp. did not decide to transfer ownership of the funds, the funds are not property of the estate but are still subject to any and all rights that the bank may have to them. ESI and Entergy Corp. stated to Capital One that the bank is responsible and liable to the Entergy Entities for ESI's sending money to cover the negative balance in the RPC account despite the bank's informing the Entities that the debit that caused the negative balance was reversed. Capital One, however, denied that it has liability to any of the Entergy Entities with respect to the Disputed Funds in the RPC account. Entergy Corp. and five of its non-debtor affiliates asserted counterclaims against Capital One. In August 2006, the Entergy Entities filed a complaint against Capital One before the Civil District Court for the Parish of Orleans, State of Louisiana. The case was later transferred to the U.S. District Court for the Eastern District of Louisiana in September. The Entergy Entities have also filed proofs of claim in ENOI's case for their pro rata portion of the Disputed Funds. Thomas M. Flanagan, Esq., at Stanley, Flanagan & Reuter, LLC, in New Orleans, Louisiana, represents the Entergy Entities in the case. Headquartered in Baton Rouge, Louisiana, Entergy New Orleans Inc. -- http://www.entergy-neworleans.com/-- is a wholly owned subsidiary of Entergy Corporation. Entergy New Orleans provides electric and natural gas service to approximately 190,000 electric and 147,000 gas customers within the city of New Orleans. Entergy New Orleans is the smallest of Entergy Corporation's five utility companies and represents about 7% of the consolidated revenues and 3% of its consolidated earnings in 2004. Neither Entergy Corporation nor any of Entergy's other utility and non-utility subsidiaries were included in Entergy New Orleans' bankruptcy filing. Entergy New Orleans filed for chapter 11 protection on Sept. 23, 2005 (Bankr. E.D. La. Case No. 05-17697). Elizabeth J. Futrell, Esq., and R. Partick Vance, Esq., at Jones, Walker, Waechter, Poitevent, Carrere & Denegre, L.L.P., represent the Debtor in its restructuring efforts. Carey L. Menasco, Esq., Philip Kirkpatrick Jones, Jr., Esq., and Joseph P. Hebert, Esq., at Liskow & Lewis, APLC, represent the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed total assets of $703,197,000 and total debts of $610,421,000. (Entergy New Orleans Bankruptcy News, Issue No. 30; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) FOAMEX INTERNATIONAL: Wants Plan Solicitation Procedures Amended ---------------------------------------------------------------- Foamex International Inc. and its debtor-affiliates seek to provide supplemental disclosure in their Second Amended Plan of Reorganization and Disclosure Statement with regard to certain Trading Restrictions. To ensure full, fair and adequate disclosure of the possible Trading Restrictions, the Debtors ask the U.S. Bankruptcy Court for the District of Delaware to amend the Disclosure Statement and Solicitation Procedures Order to: (a) authorize the distribution of the Supplemental Solicitation Packages, which includes the First Supplement to the Disclosure Statement, to holders of Interests in Class 9 -- Existing Preferred Stock, and Class 10 -- Existing Common Stock; (b) establish January 11, 2007, as the new deadline by which beneficial holders in Classes 9 and 10 must return the Beneficial Holder Ballot they received; and (c) establish January 18, 2007, as the new Voting Deadline for the Classes 9 and 10, and the new deadline for Classes 9 and 10 to file objections to confirmation of the Second Amended Plan. For them to have sufficient time to complete the solicitation of votes from Classes 9 and 10, the Debtors also ask the Court to adjourn the Confirmation Hearing to a date that is approximately one week after January 18, 2007. Pauline K. Morgan, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, points out that under the Disclosure Statement and Solicitation Procedures Order, holders of Interests in Classes 9 and 10 are afforded approximately five weeks to vote to accept or reject the Second Amended Plan. Interestholders in Classes 9 and 10 will have approximately seven weeks to review and contemplate the Second Amended Plant and approximately four weeks to review the First Supplement Disclosure. The Debtors further propose that all procedures under the Disclosure Statement and Solicitation Procedures Order remain unaffected, provided that any Class 9 or 10 Interestholder who already voted before the transmission of the Supplemental Solicitation Package but who does not submit a subsequent vote before the Class 9 and 10 Voting Deadline should have their original vote counted. Headquartered in Linwood, Pa., Foamex International Inc. -- http://www.foamex.com/-- is the world's leading producer of comfort cushioning for bedding, furniture, carpet cushion and automotive markets. The Company also manufactures high- performance polymers for diverse applications in the industrial, aerospace, defense, electronics and computer industries. The Company and eight affiliates filed for chapter 11 protection on Sept. 19, 2005 (Bankr. Del. Case Nos. 05-12685 through 05-12693). Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP, represent the Debtors in their restructuring efforts. Houlihan, Lokey, Howard and Zukin and O'Melveny & Myers LLP are advising the ad hoc committee of Senior Secured Noteholders. Kenneth A. Rosen, Esq., and Sharon L. Levine, Esq., at Lowenstein Sandler PC and Donald J. Detweiler, Esq., at Saul Ewings, LP, represent the Official Committee of Unsecured Creditors. As of July 3, 2005, the Debtors reported $620,826,000 in total assets and $744,757,000 in total debts. (Foamex International Bankruptcy News, Issue No. 35; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) FOAMEX INT'L: U.S. Trustee Amends Creditors Panel Membership ------------------------------------------------------------ Kelly Beaudin Stapleton, the United States Trustee for Region 3, amends the membership of the Official Committee of Unsecured Creditors in Foamex International Inc. and its debtor-affiliates' chapter 11 cases, to reflect the resignation of J. Donald Hamilton of Lyondell Chemical Corporation; Candida Wolfram of Shell Chemical, LP; and Jack Howard of Steel Partners II, LP. The Creditors Committee is now composed of: 1. Stuart Kratter Bank of New York 101 Barclay Street, 8W New York, New York 10286 Tel: (212) 815-5466 Fax: (212) 815-5131 2. Dana Cann Financial Analyst Pension Benefit Guaranty Corporation 1200 K. Street, NW-Ste 340 Washington, DC 20005-4026 Tel: (202) 326-4020x3062 Fax: (202) 326-4112 3. Mark E. Schwarz Newscastle Partners, LP 300 Crescent Court, Ste. 1110 Dallas, Texas 75201 Tel: (214) 661-7474 Fax: (214) 661-7475 4. Donovan Williams 439 Fairview Avenue Coventry, Rhode Island 02816 Tel: (401) 615-2861 Headquartered in Linwood, Pa., Foamex International Inc. -- http://www.foamex.com/-- is the world's leading producer of comfort cushioning for bedding, furniture, carpet cushion and automotive markets. The Company also manufactures high- performance polymers for diverse applications in the industrial, aerospace, defense, electronics and computer industries. The Company and eight affiliates filed for chapter 11 protection on Sept. 19, 2005 (Bankr. Del. Case Nos. 05-12685 through 05-12693). Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP, represent the Debtors in their restructuring efforts. Houlihan, Lokey, Howard and Zukin and O'Melveny & Myers LLP are advising the ad hoc committee of Senior Secured Noteholders. Kenneth A. Rosen, Esq., and Sharon L. Levine, Esq., at Lowenstein Sandler PC and Donald J. Detweiler, Esq., at Saul Ewings, LP, represent the Official Committee of Unsecured Creditors. As of July 3, 2005, the Debtors reported $620,826,000 in total assets and $744,757,000 in total debts. (Foamex International Bankruptcy News, Issue No. 35; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) FONIX CORP: Sells $1,038,750 9% Debentures to McCormack Avenue -------------------------------------------------------------- Fonix Corporation entered into a securities purchase agreement with McCormack Avenue Ltd. relating to the purchase and sale of the company's Series E 9% Secured Subordinated Convertible Debenture in the principal amount of $1,038,750. Pursuant to the Agreement, McCormack paid the purchase price by tendering outstanding promissory notes in the amounts of $300,000 and $350,000, together with combined interest thereon of $63,750, and agreed that advances to the company in the amount of $325,000 will constitute part of the purchase price. The Debenture is convertible into shares of the company's Class A common stock. McCormack agreed not to convert the Debenture to the extent that it will cause McCormack to beneficially own in excess of 4.999% of the then-outstanding shares of the company's Class A common stock, except in the case of a merger by the company or other organic change. The company and McCormack also entered into a registration rights agreement, pursuant to which the company agreed to file a registration statement to register the resale by McCormack of up to 300,000,000 shares of Fonix Class A common stock. The company did not receive new capital in connection with the issuance and sale of the Debenture. The Debenture was sold without registration under the 1933 Act in reliance on Section 4(2) of the 1933 Act. A full text-copy of the Securities Purchase Agreement may be viewed at no charge at http://ResearchArchives.com/t/s?170a A full text-copy of the Series E 9% Secured Subordinated Convertible Debenture may be viewed at no charge at http://ResearchArchives.com/t/s?170b A full text-copy of the Registration Rights Agreement may be viewed at no charge at http://ResearchArchives.com/t/s?170c Based in Salt Lake City, Utah, Fonix Corporation (OTCBB: FNIX) -- http://www.fonix.com/-- is an innovative speech recognition and text-to-speech technology company that provides value-added speech solutions through its wholly owned subsidiary, Fonix Speech, Inc. Interactive speech technologies allow Fonix to provide customers with comprehensive cost-effective solutions to enhance and expand their communications needs. Fonix Corporation's telecom subsidiaries, LTEL Holdings, Inc., LecStar DataNet, Inc., LecStar Telecom, Inc. and Fonix Telecom, Inc. filed for bankruptcy protection on Oct. 2, 2006 in Delaware pursuant to Chapter 7 under the U.S. Bankruptcy Code. A trustee has been appointed to liquidate the assets of those entities. Going Concern Doubt Hansen, Barnett & Maxwell, the Company's auditor, expressed substantial doubt about the Company's ability to continue as a going concern after auditing the Company's balance sheet for the year ending Dec. 31, 2005. The auditor pointed to the Company's significant losses; negative cash flows from operating activities for three years; and negative working capital. FONIX CORP: Sells Series E 9% Debentures to Southridge Partners --------------------------------------------------------------- Fonix Corporation entered into a securities purchase agreement with Southridge Partners LP relating to the purchase and sale of the company's Series E 9% secured subordinated convertible debenture in the principal amount of $850,000. Pursuant to the Agreement, Southridge paid the purchase price by tendering a prior debenture in the aggregate amount of $640,713 and agreed that an advance to the company in the amount of $75,000 made in November 2006, would also constitute part of the purchase price. Southridge agreed to fund the remaining $134,286 upon the effectiveness of a registration statement for the resale of shares issuable to Southridge. The Debenture is convertible into shares of the company's Class A common stock. Southridge has agreed not to convert the Debenture to the extent that the conversion causes beneficially ownership to exceed 4.999% of the then-outstanding shares of Class A common stock of the company except in the case of a merger by the company or other organic change. The company and Southridge also entered into a registration rights agreement, pursuant to which the company agreed to file a registration statement to register the resale by Southridge of up to 300,000,000 shares of Fonix Class A common stock. The cash component of the purchase price is intended to be used by the company for working capital and general corporate purposes. The Debenture was sold without registration under the 1933 Act in reliance on Section 4(2) of the 1933 Act. A full text-copy of the Securities Purchase Agreement may be viewed at no charge at http://ResearchArchives.com/t/s?1703 A full text-copy of the Secured Subordinated Convertible Debenture may be viewed at no charge at http://ResearchArchives.com/t/s?1704 A full text-copy of the Registration Rights Agreement may be viewed at no charge at http://ResearchArchives.com/t/s?1705 Based in Salt Lake City, Utah, Fonix Corporation (OTCBB: FNIX) -- http://www.fonix.com/-- is an innovative speech recognition and text-to-speech technology company that provides value-added speech solutions through its wholly owned subsidiary, Fonix Speech, Inc. Interactive speech technologies allow Fonix to provide customers with comprehensive cost-effective solutions to enhance and expand their communications needs. Fonix Corporation's telecom subsidiaries, LTEL Holdings, Inc., LecStar DataNet, Inc., LecStar Telecom, Inc. and Fonix Telecom, Inc. filed for bankruptcy protection on Oct. 2, 2006 in Delaware pursuant to Chapter 7 under the U.S. Bankruptcy Code. A trustee has been appointed to liquidate the assets of those entities. Going Concern Doubt Hansen, Barnett & Maxwell, the Company's auditor, expressed substantial doubt about the Company's ability to continue as a going concern after auditing the Company's balance sheet for the year ending Dec. 31, 2005. The auditor pointed to the Company's significant losses; negative cash flows from operating activities for three years; and negative working capital. GENESCO INC: Earns $16 Million in 2006 Third Quarter Ended Oct. 29 ------------------------------------------------------------------ Genesco Inc. reported earnings before discontinued operations of $16 million for the third quarter ended Oct. 28, 2006. Earnings before discontinued operations were $16.2 million, for the third quarter ended Oct. 29, 2005. Earnings before discontinued operations for the third quarter of this year reflected SFAS 123(R) share-based compensation and restricted stock expense of $1.7 million before taxes. Earnings from the third quarter last year reflected income of $800,000, primarily from an excess litigation provision. Net sales for the third quarter of fiscal 2007 increased 15% to $364 million compared to $316 million for the third quarter of fiscal 2006. Genesco Chairman and Chief Executive Officer Hal N. Pennington, said, "Our better than expected third quarter results were driven by excellent performances at Journeys and Journeys Kidz, Johnston & Murphy and Dockers. While we expect the Underground Station business to remain challenging in the fourth quarter, our confidence that the strength we have seen in these other businesses will continue in the Holiday selling season is reflected in our increased earnings guidance for the full fiscal year. "Net sales at Journeys Group increased 20% to approximately $184 million, same store sales rose 9% and footwear unit comps increased 18% in the third quarter. As expected, many of the same trends that produced success in the second quarter continued through Back-to-School. Journeys Kidz again reported strong growth, with sales up 55% and comparable store sales up 9%. Additionally, we remain pleased with the performance of Shi by Journeys. We feel very good about our merchandise assortment and the continuing momentum of the entire Journeys' group as we look forward to the Holiday selling season. "Net sales at Hat World Group increased 13% to approximately $78 million and same store sales declined 1%, primarily reflecting weakness in Hat World stores serving the urban markets. We are forecasting a modest comparable sales improvement in the fourth quarter and we remain on track to open 101 new stores, representing a 14% increase in the store base, in the fiscal year. Hat World remains a high margin, highly profitable business with significant expansion opportunities and we remain very excited about its potential. "Net sales for the Underground Station Group, which includes the Jarman stores, were $35 million and same store sales declined 11% in the third quarter. Same store sales at Underground Station fell 11% primarily due to continued weakness in men's athletic and urban markets in general. Our fourth quarter expectations do not reflect an improvement in the Underground Station business. Longer term, Underground Station is working to improve its women's product offering and non-footwear assortment. "Johnston & Murphy Group's net sales increased 14% to approximately $44 million. Wholesale sales increased 25% and same store sales rose 6%. Johnston & Murphy's expanded dress and dress casual collection continues to gain retail shelf space and both footwear and non-footwear products are performing extremely well in the Johnston & Murphy stores. Sales growth and gross margin improvement combined to double operating margin compared to last year. "Third quarter sales of licensed brands increased 31% to approximately $23 million. The entire Dockers' Footwear product line is retailing well and backlog is strong." At Oct. 28, 2006, the company's balance sheet showed $792.6 million in total assets, $435.4 million in total liabilities, and $357.1 million in total stockholders' equity. About Genesco Inc. Genesco Inc. (NYSE: GCI) -- http://www.genesco.com/-- a Nashville-based specialty retailer, sells footwear, headwear and accessories in more than 1,900 retail stores in the United States and Canada, principally under the names Journeys, Journeys Kidz, Shi by Journeys, Johnston & Murphy, Underground Station, Hatworld, Lids, Hat Zone, Cap Factory, Head Quarters and Cap Connection, and on internet websites http://www.journeys.com, http://www.journeyskidz.com,http://www.undergroundstation.com, http://www.johnstonmurphy.com,http://www.lids.com, http://www.hatworld.com,and http://www.lidscyo.com. The company also sells footwear at wholesale under its Johnston & Murphy brand and under the licensed Dockers. * * * As reported in the Troubled Company Reporter on Sept. 28, 2006, Moody's Investors Service affirmed its Ba3 corporate family rating on Genesco Inc. and upgraded the company's convertible subordinated debentures from B2 to B1. GRANITE BROADCASTING: Wants to Borrow $25 Mil. from Silver Point ---------------------------------------------------------------- Granite Broadcasting Corp. and its debtor-affiliates ask the U.S Bankruptcy Court for the Southern District of New York for permission to obtain secured postpetition financing of up to $25,000,000, from certain affiliates of Silver Point Finance, LLC, with Silver Point as collateral and administrative agent. Lender Total Commitment ------ ---------------- SPCP Group III, LLC $2,500,000 SPCP Group, LLC 22,500,000 ----------- $25,000,000 Without immediate access to fresh financing, the Debtors' business operations will be disrupted and their going concern value could be jeopardized to the detriment of their creditors, employees and other parties-in-interest Lawrence I. Wills, the Debtors' chief financial officer, relates. According to Mr. Wills, prior to the Petition Date, the Debtors approached several financial institutions about providing postpetition financing but no institution was willing to make a loan on an unsecured basis. After evaluating requirements, the Debtors determined that their efforts to arrange postpetition financing should be focused on Silver Point. Mr. Wills assures the Court that the Debtors' efforts to seek necessary postpetition financing from other sophisticated lending institutions satisfy the statutory requirements of Section 364(c) of the Bankruptcy Code. Terms of the DIP Agreement The Debtors and Silver Point engaged in good faith and extensive arm's-length negotiations that culminated in the debtor-in- possession financing agreement dated Dec. 11, 2006. Upon the Court's entry of an interim order, the Debtors will be authorized to immediately obtain financing in the aggregate principal amount of up to $5,000,000. The term of the DIP Agreement will run from the closing date to the earliest to occur of: (i) 45 days after the date of entry of the Interim Order in form and substance satisfactory to the DIP Agent, the existing senior administrative agent and the existing senior noteholder trustee; (ii) Sept. 1, 2007; (iii) the effective date and the date of substantial consummation of a plan of reorganization; and (iv) the date on which the DIP Loans become due and payable. The DIP Facility will bear interest at a rate equal to the London Inter-Bank Offer Rate plus 275 basis points. Upon the occurrence and during the continuance of any default in the payment of principal, interest or other amounts due under the DIP Financing Agreement, interest will be payable on demand at 2% above the then applicable rate. The Borrowers covenant and agree that, until termination of all of the Commitments and payment in full of the Obligations, they will not permit the cumulative amount of: (a) Broadcast Cash Flow from Dec. 1, 2006, through the end of each fiscal month after that to be less than 85% of the amount set for the calendar month in their Financial Plan; and (b) Corporate Expenses from Dec. 1, 2006, through the end of each fiscal month after that to exceed 115% of the amount set for the calendar month in their Financial Plan. A copy of that Financial Plan [which is presumably annexed as Schedule 1.1(b) to the DIP Financing Agreement] is available at no charge at http://ResearchArchives.com/t/s?1707 The Borrowers' obligations under the DIP Agreement will be granted super-priority administrative claim status and will be secured by: -- a first priority, perfected security interest in, and lien, on all of unencumbered collateral and any postpetition assets of the estates; -- a first priority, perfected priming security interest in and lien, on all prepetition collateral in all cases senior to any liens, claims or encumbrances presently securing the existing senior indebtedness; and -- a junior, perfected security interest in and lien on all junior collateral. The liens and claims granted to secure the DIP Obligations are subject only, during the occurrence and continuance of an Event of Default, to payment of the Carve-Out. The Carve-Out means (a) amounts payable pursuant to 28 U.S.C. Section 1930(a)(b), and (b) amounts payable in respect of professional expenses of the Debtors and a statutory committee appointed in the Debtors' cases. The Borrowers agree to pay to the DIP Lenders a commitment fee, an agency fee, and additional fees, which are non-refundable under all circumstances: * Commitment Fee: 1.25% on the first $15,000,000 of the Commitment and 0.625% on the remaining $10,000,000. Half of the Commitment Fee will be payable on the date the Court enters the Interim Order and the remaining half will be payable on the Closing Date; * Additional Fees: 0.625% of the amount of the reserved $10,000,000 of the Commitment and to the extent released from the reserve requirements under the DIP Financing Agreement; * Agency Fee: $75,000 paid on the Closing Date; and * Unused Line Fee: 0.50% per annum of the total Commitment amount over the average dally outstanding principal amount of all Loans during the calculation period. The Borrowers will jointly and severally indemnify and hold harmless each of the DIP Lenders from and against all claims, damages, losses, liabilities, etc., arising out of or in connection with the Financing Arrangement. The Debtors intend to use a portion of the DIP Facility's proceeds to pay any fees, deposits, expenses and any other amounts owed to the DIP Lenders, the DIP Agent, the Existing Senior Agents and the Existing Senior Noteholder Trustee. Liens and Claims Investigation The DIP Agreement provides that from the Petition Date through January 31, 2007, the Official Committee of Unsecured Creditors and any party-in-interest will be entitled to investigate the validity, perfection, enforceability, and extent of the Existing Senior Liens and any potential claims of the Debtors or their estates against the Existing Senior Agents, the Existing Senior Lenders, the Existing Senior Noteholder Trustee, and the Existing Senior Noteholders. Any challenge to the Existing Senior Liens or the assertion of any other claims or causes of action of the Debtors or their estates against any of the Existing Senior Agents, the Existing Senior Lenders, the Existing Senior Noteholder Trustee or the Existing Senior Noteholders must be made by commencing an adversary proceeding on or before the investigation termination date. If no action is filed on or before the Investigation Termination Date, all parties will be forever barred from bringing any action. In the event of a timely and successful challenge by a plaintiff in an action, the Court will fashion the appropriate remedy with respect to the Existing Senior Agents, the Existing Senior Lenders, the Existing Senior Noteholder Trustee and the Existing Senior Noteholders after hearing from all parties. A full-text copy of the DIP Agreement is available for free at: http://ResearchArchives.com/t/s?1708 Headquartered in New York, Granite Broadcasting Corp. -- http://www.granitetv.com/-- owns and operates, or provides programming, sales and other services to 23 channels in 11 markets: San Francisco, California; Detroit, Michigan; Buffalo, New York; Fresno, California; Syracuse, New York; Fort Wayne, Indiana; Peoria, Illinois; Duluth, Minnesota-Superior, Wisconsin; Binghamton, New York; Utica, New York and Elmira, New York. The company's channel group includes affiliates of NBC, CBS, ABC, CW and My Network TV, and reaches approximately 6% of all U.S. television households. The Company and five of its debtor-affiliates filed for chapter 11 protection on Dec. 11, 2006 (Bankr. S.D. N.Y. Case No. 06-12984). Ira S. Dizengoff, Esq., at Akin, Gump, Strauss, Hauer & Feld, LLP, represents the Debtors in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated assets of $443,563,020 and debts of $641,100,000. GRAYSON CLO: Moody's Rates $31-Mil. Class D Senior Notes at Ba2 --------------------------------------------------------------- Moody's Investors Service assigned ratings to Notes and Combination Securities issued by Grayson CLO, Ltd.: -- Aaa to $1,015,000,000 Class A-1a Floating Rate Senior Secured Extendable Notes Due 2021; -- Aa1 to $111,500,000 Class A-1b Floating Rate Senior Secured Extendable Notes Due 2021; -- Aa2 to $68,000,000 Class A-2 Floating Rate Senior Secured Extendable Notes Due 2021; -- A2 to $72,000,000 Class B Floating Rate Senior Secured Deferrable Interest Extendable Notes Due 2021; -- Baa2 to $75,000,000 Class C Floating Rate Senior Secured Deferrable Interest Extendable Notes Due 2021; -- Ba2 to $31,000,000 Class D Floating Rate Senior Secured Deferrable Interest Extendable Notes Due 2021; and, -- Baa2 to $90,000,000 aggregate face amount of Grayson Combination Trust 2006 Pass Through Certificates due 2021. The transaction is managed by Highland Capital Management, L.P. Moody's noted that its ratings of notes issued by this cash flow CDO reflect the credit quality of the collateral pool, the credit enhancement for the notes inherent in the capital structure and the transaction's legal structure. The ratings are based on the expected loss posed to the notes relative to the promise of receiving the present value of such payments. GUARDIAN TECH: Sept. 30 Balance Sheet Upside-Down by $1.1 Million ----------------------------------------------------------------- Guardian Technologies International Inc.'s balance sheet at Sept. 30, 2006, showed $2.9 million in total assets, $3.2 million in total liabilities, and $783,023 in common shares subject to repurchase, resulting in a $1.1 million stockholders' deficit. The company's balance sheet at Sept. 30, 2006, also showed strained liquidity with $388,454 in total current assets available to pay $3.2 million in total current liabilities. Guardian Technologies reported a $3.3 million net loss on $51,197 of revenues for the third quarter ended Sept. 30, 2006, compared with a $2.4 million net loss on $43,288 of revenues for the same period in 2005. The increase in net loss is primarily due to the $329,000 increase in selling, general and administrative expense and the charge to interest expense of $644,000 in the current quarter. The company did not incur any interest expense for the comparable quarter in 2005. Revenues resulted from the sale, implementation and maintenance of the company's FlowPoint healthcare solutions. The company did not generate any revenues from the sale of its PinPoint product during the third quarter of 2006 and 2005. Cost of sales for the quarter was $136,393 versus $210,482 for the same period in 2005, a decrease of approximately $74,089. Cost of sales for the period includes fixed expense for the amortization of the Wise intangible asset for developed software of $115,609 in 2006 and $100,790 in 2005. Other costs for 2006 of $20,784 and in 2005 of $109,692 represent expenses for purchased equipment and supplies for customers, installation labor and travel costs. The decrease in costs is due to lower equipment and labor costs for the third quarter of 2006. Selling, general and administrative expenses for the third quarter increased $329,432, or 14.8%, to $2,561,512 for fiscal 2006 as compared to $2,232,080 for the comparable period in fiscal 2005. The bulk of the increase was accounted for by the increase in stock-based compensation of $185,574, the increase in professional fees of $136,890, and the increase in miscellaneous expenses of $70,503. The increase in stock-based compensation for employees of $138,087 represents the impact of accelerating in the fourth quarter of 2005 the expense of key management and staff hiring incentives using stock options. The increase in stock-based compensation expense for consultants of $47,487 reflects the end of the amortization period in the second quarter of 2005 for retention consulting arrangements after the reverse acquisition in June 2003. Professional fees increased for the quarter ended Sept. 30 versus the same quarter last year by approximately $136,890 due to a decrease of $19,641 in the areas of legal and miscellaneous outside consultants, an increase of $37,837 in accounting fees as a result of the 2005 SEC review and restatement of the company's consolidated financial statements for the years ended Dec. 31, 2003 and 2004, and for each of the quarterly periods in the nine months ended Sept. 30, 2005, and an increase of $118,694 in consultants due to the current years expenditures for the certification process in the United States and Russian markets. The increase in miscellaneous expenses reflects a provision for doubtful accounts of $102,000 verses no provision in the same quarter of 2005. Full-text copies of the company's consolidated financial statements for the quarter ended Sept. 30, 2006 are available for free at http://researcharchives.com/t/s?1719 During the nine months ended Sept. 30, 2006, cash decreased by $2.4 million, mainly due to net cash used in operating activities of $4.5 million as a result of the net loss. Net cash provided by financing activities was $2.4 million. Going Concern Doubt Goodman & Company, L.L.P., in Norfolk, Virginia, raised substantial doubt about Guardian Technologies International, Inc.'s ability to continue as a going concern after auditing the company's financial statements for the years ended Dec. 31, 2005, and 2004. The auditor pointed to the company's significant operating losses since inception and need for additional financing. About Guardian Technologies Headquartered in Herndon, Virginia, Guardian Technologies International Inc. (OTCBB: GDTI) -- http://www.guardiantechintl.com/-- is a technology company that designs and develops sophisticated imaging informatics solutions for the aviation/homeland security and healthcare markets. GUNDLE SLT: Volatile Prices Cue Moody's SGL Rating Downgrade ------------------------------------------------------------ Moody's Investors Service downgraded Gundle/SLT Environmental, Inc.'s Speculative Grade Liquidity rating to SGL-3 from SGL-2. The downgrade to SGL-3 reflects Moody's expectation that GSE will experience weakened performance in the next twelve months after the expiration of a profitable solid waste contract and increased competition in geotextiles globally. The downgrade also reflects the company's exposure to volatile resin prices as demonstrated by an inability to pass along these costs effectively in recent months, and the consequent deterioration in cash flow below Moody's expectations in 2006. The Corporate Family Rating is B2 with a stable outlook. Additionally, cushions under financial covenants are expected to be tight aftrer step-downs in the maximum leverage covenant and step-ups in the minimum interest and fixed charge coverage ratios on March 31, 2007. The SGL-3 rating reflects Moody's expectation that liquidity should be adequate throughout the next twelve months as operating cash flow, combined with cash balances and availability under the company's secured revolving credit facility should be sufficient to cover capital needs. The liquidity ratings could revert to SGL-2 if the company can successfully bolster cushions under its credit facility by improving cash flow generation and profitability through expense control and the successful execution of new business initiatives. A further downgrade in the ratings could result from continued negative free cash flow caused by a decline in revenues and profitability in excess of Moody's expectations. Gundle/SLT Environmental, Inc., based in Houston, Texas, is a global manufacturer, marketer, and installer of geosynthetic lining products and services, which are used in containment systems for the prevention of groundwater contamination and for the confinement of water, industrial liquids, solids and gases. The company also manufactures and sells non-woven textiles as roll goods and for use in its geocomposite products, and has expanded into the installation of synthetic turf. GSE had revenue of $343 million for last twelve months ended Sept. 30, 2006, and sells to customers in ninety countries. HILTON HOTELS: Moody's Holds Ba3 Rating on $46-Mil. Class F Certs. ------------------------------------------------------------------ Moody's Investors Service affirmed the ratings of eight classes of Hilton Hotels Pool Trust, Commercial Mortgage Pass-Through Certificates, Series 2000-HLT as: -- Class A-1, $46,892,257. Fixed, affirmed at Aaa; -- Class A-2, $175,000,000, Floating, affirmed at Aaa; -- Class X, Notional, affirmed at Aaa; -- Class B, $60,800,000, Fixed, affirmed at Aa2; -- Class C, $66,800,000,000, Fixed, affirmed at A3; -- Class D, $32,900,000, Fixed, affirmed at Baa3; -- Class E, $24,700,000,000, Fixed, affirmed at Ba1; and -- Class F, $46,880,781, Fixed, affirmed at Ba3. The transaction consists of five cross-defaulted and cross- collateralized first mortgages secured by fee interests in five full service hotel properties owned by affiliates of Hilton Hotels Corporation. The properties include the Hilton San Francisco & Towers, Chicago Hilton & Towers, McLean Hilton at Tyson's Corner, Hilton at Short Hills and the Pointe Hilton Squaw Peak Resort. As of the Dec. 5, 2006 distribution date, the transaction's aggregate certificate balance has decreased by approximately 9.1% to $454 million from $499.6 million at securitization as a result of loan amortization. In July 2003 Moody's downgraded Classes B, C, D, E and F to their current ratings based on a significant decline in collateral performance. Collateral performance has improved since its all- time low in calendar year 2003, although net cash flow remains significantly lower than that at securitization. RevPAR for the total pool was $121.67 for the trailing 12-month period ending September 2006, representing a 1.7% increase from Moody's RevPAR of $119.50 at securitization. However, Moody's net cash flow for calendar year 2006 of $55.2 million represents an approximate decrease of 35% from Moody's expectation of $84.9 million at securitization. The decrease in net cash flow is due to increases in operating expenses, which exceed increases in revenues. The loan documents provide for the trapping of excess cash flow when the debt service coverage ratio falls below 1.52x or when net cash flow falls below $70 million. Thus far, $166.1 million in reserves have been trapped under this provision. At such time as DSCR or cash flow thresholds are again met, trapped cash will be distributed to the borrower. Based on Moody's adjusted net cash flow and capitalization rates, as well as the use of floor values, the pool's weighted average loan to value ratio is 72.6%, compared to 76.4% at last review. At securitization Moody's LTV was 63.9%. The Hilton San Francisco & Towers represents 50% of the allocated loan amount. RevPAR for the trailing 12-month period ending September 2006 and Moody's net cash flow for calendar year 2006 were $114.71 and $13.8 million, compared to Moody's expectation of $127.50 and $37.9 million at securitization. The hotel is under performing its competitive set based on penetration rates provided by Smith Travel Research. The Chicago Hilton & Towers represents 28.0% of the allocated loan amount. RevPAR for the trailing 12-month period ending September 2006 and Moody's net cash flow for calendar year 2006 were $127.72 and $22.7 million, compared to Moody's expectation of $113.50 and $27.8 million at securitization. The hotel is underperforming its competitive set. The McLean Hilton at Tyson's Corner represents 8% of the allocated loan amount. RevPAR for the trailing 12-month period ending September 2006 and Moody's net cash flow for calendar year 2006 were $120.01 and $8.2 million, compared to Moody's expectation of $88.50 and $6.3 million at securitization. The hotel's performance has steadily improved since 2002. The hotel is significantly outperforming its competitive set. Low debt service coverage and the weak performance of the Hilton San Francisco & Towers remain concerns for this transaction. However, Moody's is affirming its ratings based on the improved performance of the remaining hotels, the significant cash reserves and the Hilton sponsorship. HOLLINGER INC: Illinois Court Mulls Dismissal of Securities Suit ---------------------------------------------------------------- The U.S. District Court for the Northern District of Illinois has yet to rule on a motion to dismiss the third amended complaint in the consolidated securities class action against Sun-Times Media Group Inc. In February and April 2004, the Teachers' Retirement System of Louisiana, Kenneth Mozingo, and Washington Area Carpenters Pension and Retirement Fund initiated purported class actions against: -- the company; -- certain of the company's former executive officers and former directors of the company; -- The Ravelston Corp. Ltd.; -- certain affiliated entities; and -- KPMG LLP, the company's independent registered public accounting firm. The suit asserted claims under federal and Illinois securities laws and claims of breach of fiduciary duty and aiding and abetting in breaches of fiduciary duty. On July 9, 2004, the court consolidated the three actions for pretrial purposes. The consolidated action is "In re Hollinger Inc. Securities Litigation, No. 04C-0834," (Class Action Reporter, Nov. 2, 2006). Plaintiffs filed an amended consolidated class action complaint on Aug. 2, 2004, and a second consolidated amended class action complaint on Nov. 19, 2004. The named plaintiffs in the second consolidated amended class action complaint are Teachers' Retirement System of Louisiana, Washington Area Carpenters Pension and Retirement Fund, and E. Dean Carlson. They are purporting to sue on behalf of an alleged class consisting of themselves and all other purchasers of securities of the company between and including Aug. 13, 1999, and Dec. 11, 2002. The second consolidated amended class action complaint asserted claims under federal and Illinois securities laws and claims of breach of fiduciary duty and aiding and abetting in breaches of fiduciary duty in connection with misleading disclosures and omissions regarding: certain "non-competition" payments, the payment of allegedly excessive management fees, allegedly inflated circulation figures at the Chicago Sun-Times, and other alleged misconduct. On Sept. 13, 2006, plaintiffs filed a third consolidated amended class action complaint. The new complaint added an additional named plaintiff, Cardinal Mid-Cap Value Equity Partners, L.P. Its charge is identical to the prior complaint and asserted the same claims. On Oct. 27, 2006, the company moved to dismiss the third consolidated amended class action complaint. The company's motion is pending. The suit is "In Re: Hollinger International Securities Litigation, Case No. 1:04-cv-00834," filed in the U.S. District Court for the Northern District of Illinois under Judge David H. Coar. Representing the plaintiffs are: (1) Cauley Geller Bowman Coates & Rudman, LLP (New York) 200 Broadhollow, Suite 406 Melville, NY 11747 Tel: (631) 367-7100 Fax: (631) 367-1173 (2) Charles J. Piven, Esq. World Trade Center-Baltimore 401 East Pratt, Suite 2525 Baltimore, MD 21202 Tel: (410) 332-0030 (3) Federman & Sherwood 120 North Robinson, Suite 2720 Oklahoma City, OK 73102 Tel: (405) 235-1560 (4) Grant & Eisenhofer, P.A. 1201 N. Market Street, Suite 2100 Wilmington, DE, 19801 Tel: (302) 622-7000 Fax: (302) 622-7100 (5) Much Shelist Freed Denenberg Ament & Rubenstein, PC 191 North Wacker Drive, Suite 1800 Chicago, IL 60606-1615 Tel: (800) 470-6824 Fax: (312) 621-1750 (6) Schiffrin & Barroway, LLP 3 Bala Plaza E Bala Cynwyd, PA 19004 Tel: (610) 667-7706 Fax: (610) 667-7056 Ravelston Receivership and CCAA Proceedings On April 20, 2005, the Court issued two orders by which The Ravelston Corporation Limited and Ravelston Management Inc. were: (i) placed in receivership pursuant to the Bankruptcy & Insolvency Act (Canada) and the Courts of Justice Act (Ontario); and (ii) granted protection pursuant to the Companies' Creditors Arrangement Act (Canada). RSM Richter Inc. was appointed receiver and manager of all of the property, assets, and undertakings of Ravelston and RMI. Ravelston holds approximately 16.5% of the outstanding Retractable Common Shares of Hollinger. On May 18, 2005, the Court further ordered that the Receivership Order and the CCAA Order be extended to include Argus Corporation Limited and its five subsidiary companies which collectively own, directly or indirectly, 61.8% of the outstanding Retractable Common Shares and approximately 4% of the Series II Preference Shares of Hollinger. On June 12, 2006, the Court appointed Richter as receiver and manager and interim receiver of all the property, assets, and undertaking of Argent News Inc., a wholly owned subsidiary of Ravelston. The Ravelston Entities own, in aggregate, approximately 78% of the outstanding Retractable Common Shares and approximately 4% of the Series II Preference Shares of Hollinger. The Court has extended the stay of proceedings against the Ravelston Entities to Jan. 19, 2007. About Hollinger Inc. The principal asset of Hollinger Inc. (TSX: HLG.C)(TSX: HLG.PR.B) -- http://www.hollingerinc.com/-- is its approximately 70.1% voting and 19.7% equity interest in Sun-Times Media Group Inc. (formerly Hollinger International Inc.), a newspaper publisher with assets which include the Chicago Sun-Times and a large number of community newspapers in the Chicago area. Hollinger also owns a portfolio of commercial real estate in Canada. Litigation Risks Hollinger Inc. faces various court cases and investigations: (1) a consolidated class action complaint filed in Chicago, Illinois; (2) a class action lawsuit that was filed in the Saskatchewan Court of Queen's Bench on Sept. 7, 2004; (3) a $425,000,000 fraud and damage suit filed in the State of Illinois by International; (4) a lawsuit seeking enforcement of a Nov. 15, 2003, restructuring proposal to uphold a Shareholders' Rights Plan, a declaration that corporate by-laws were invalid and to prevent the closing of a certain transaction; (5) a lawsuit filed by International seeking injunctive relief for the return of documents of which it claims ownership; (6) a $5,000,000 damage action commenced by a lessor of an aircraft lease, in which Hollinger was the guarantor; (7) an action commenced by the United States Securities and Exchange Commission on Nov. 15, 2004, seeking injunctive, monetary and other equitable relief; and (8) investigation by the enforcement division of the OSC. ING INVESTMENT: Moody's Rates $13-Mil. Class D Notes at Ba2 ----------------------------------------------------------- Moody's Investors Service assigned ratings to Notes and Blended Securities issued by ING Investment Management CLO III, Ltd.: -- Aaa to $255,000,000 Class A-1 Floating Rate Notes Due 2020; -- Aaa to $100,000,000 Class A-2a Floating Rate Notes Due 2020; -- Aa1 to $25,000,000 Class A-2b Floating Rate Notes Due 2020; -- Aa2 to $23,000,000 Class A-3 Floating Rate Notes Due 2020; -- A2 to $29,500,000 Class B Deferrable Floating Rate Notes Due 2020; -- Baa2 to $15,500,000 Class C Floating Rate Notes Due 2020; -- Ba2 to $13,000,000 Class D Floating Rate Notes Due 2020; and, -- Baa3 to Class J Blended Securities. The Moody's ratings of the Notes address the ultimate cash receipt of all required interest and principal payments, as provided by the Notes' governing documents, and are based on the expected loss posed to noteholders, relative to the promise of receiving the present value of such payments. The Moody's rating of the Blended Securities addresses only the ultimate receipt of the principal. The ratings reflect the risks due to the diminishment of cash flow from the underlying portfolio - consisting primarily of Senior Secured Loans - due to defaults, the transaction's legal structure and the characteristics of the underlying assets. ING Alternative Asset Management LLC will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. J. CREW: October 28 Equity Deficit Narrows to $55.1 Million ----------------------------------------------------------- J. Crew Group Inc.'s balance sheet at Oct. 28, 2006, showed total assets of $413.9 million and total liabilities of $469 million, resulting in a total stockholders' deficit of $55.1 million. The company's stockholders' deficit at Jan. 28, 2006, stood at $587.8 million. Net income increased to $26 million in the third quarter ended Oct. 28, 2006, from $3 million in the third quarter ended Oct. 29, 2005. The increase was due to an increase in operating income of $11.2 million, which resulted from the increase in gross profit attributable primarily to the 23.4% increase in revenues, and the decrease in interest expense of $13.3 million. Revenues for the third quarter of fiscal 2006 increased by $52.2 million, or 23.4%, to $275.5 million from $223.3 million in the third quarter of fiscal 2005. Gross profit increased by $30.1 million to $127.9 million in the third quarter of fiscal 2006 from $97.8 million in the third quarter of fiscal 2005. Gross margin increased to 46.4% in the third quarter of fiscal 2006 from 43.8% in the third quarter of fiscal 2005. Net interest expense decreased by $13.3 million to $5.2 million in the third quarter of 2006 from $18.5 million in the third quarter of 2005. Outstanding Debts and preferred stock were redeemed during the second quarter of 2006 with proceeds from its $285 million term loan in May 2006 and the issuance of 21.6 million shares of common stock in the company's initial public offering in July 2006. A full text-copy of the company's quarterly report on Form 10-Q may be viewed at no charge at http://ResearchArchives.com/t/s?1715 New York City-based J. Crew Group Inc. -- http://www.jcrew.com/-- is a fully integrated multi-channel specialty retailer of women's and men's apparel and accessories. J.Crew products are distributed through the Company's 166 retail and 49 factory stores, the J. Crew catalog, and the company's Internet Web site. JO-ANN STORES: Earns $100,000 in Third Quarter Ended Oct. 28 ------------------------------------------------------------ Jo-Ann Stores Inc. reported financial results for its fiscal 2007 third quarter ended Oct. 28, 2006. Net earnings for the third quarter of fiscal 2007 were $100,000, compared with a net loss of $4.1 million in the prior year third quarter. Net sales for the third quarter were $461.9 million compared to $474.2 million in the prior year. Same-store sales decreased 5.4% versus an increase of 0.7% in same-store sales for the third quarter last year. The decrease in sales was impacted by lower fall and Halloween seasonal merchandise purchases, less clearance merchandise in the stores and a reduction in advertising expenditures versus last year for comparable stores. Net sales for the nine-month period ended Oct. 28, 2006 were $1.25 billion versus $1.28 billion in the same period in the prior year. Year-to-date same-store sales decreased 5.8%, compared with a same-store sales increase of 0.3% last year. Gross margins for the third quarter of fiscal 2007 increased 180 basis points from 45.6% to 47.4% due to a less promotional pricing strategy, better sell-through on seasonal goods and reduced sales of clearance inventory. Selling, general and administrative expenses increased to 43.0% of net sales in the third quarter of fiscal 2007 from 42.0% in the third quarter last year. While total selling, general and administrative expenses are below last year's spending levels, the increase as a percentage of net sales is due to the lack of leverage resulting from lower sales. Operating profit for the third quarter was $5 million, versus a $1.7 million operating loss for the prior year third quarter. "During the quarter we made substantial progress on our merchandising strategy and inventory position," said Darrell Webb, chairman, president and chief executive officer. "While our sales were softer than we would have hoped, by being more deliberate in our seasonal purchases we expanded gross margins by a solid 180 basis points. The merchandising disciplines we instituted earlier in the year will not only positively impact our results during the December holiday season, but will also allow us to realize strong and sustainable margin improvement over time." During the third quarter of fiscal 2007, the company opened five superstores and closed six traditional stores and one superstore. Year-to-date, the company has opened 20 superstores and five traditional stores and closed 46 traditional stores and two superstores. At Oct. 28, 2006, the company's balance sheet showed $943.7 million in total assets, $563.8 million in total liabilities, and $379.9 million in total stockholders' equity. Full-text copies of the company's consolidated financial statements for the quarter ended Oct. 28, 2006, are available for free at http://researcharchives.com/t/s?1718 About Jo-Ann Stores Hudson, Ohio-based Jo-Ann Stores, Inc. (NYSE: JAS) -- http://www.joann.com/-- is the largest specialty retailer of fabrics and one of the largest specialty retailers of crafts. As of Jan. 28, 2006, the company operated 838 stores in 47 states (684 traditional stores and 154 superstores). * * * As reported in the Troubled Company Reporter on Nov. 15, 2006, Moody's Investors Service downgraded Jo-Ann Stores Inc.'s corporate family rating and probability-of-default rating to B1 from B3 and the $100 million senior subordinated note (2012) to Caa2 from B3. JP MORGAN: Moody's Holds Junk Rating on $9.2 Million of Debentures ------------------------------------------------------------------ Moody's Investors Service upgraded the rating of one class, downgraded the ratings of two classes and affirmed the ratings of 10 classes of J.P. Morgan Commercial Mortgage Finance Corp., Mortgage Pass-Through Certificates, Series 2000-C10 as: -- Class A2, $444,472,742, Fixed, affirmed at Aaa -- Class X, Notional, affirmed at Aaa -- Class B, $31,388,000, Fixed, affirmed at Aaa -- Class C, $29,541,000, Fixed, affirmed at Aaa -- Class D, $9,232,000, Fixed, affirmed at Aa1 -- Class E, $23,079,000, Fixed, affirmed at A3 -- Class F, $10,155,000, Fixed, upgraded to Baa2 from Baa3 -- Class G, $14,771,000, Fixed, affirmed at Ba1 -- Class H, $14,771,000, Fixed, affirmed at Ba2 -- Class J, $7,385,000, Fixed, affirmed at B1 -- Class K, $5,539,000, Fixed, affirmed at B3 -- Class L, $7,386,000, Fixed, downgraded to Ca from Caa2 -- Class M, $1,858,332, Fixed, downgraded to C from Ca As of the Nov. 15, 2006 distribution date, the transaction's aggregate certificate balance has decreased by approximately 18.8% to $601.1 million from $740.1 million at securitization. The Certificates are collateralized by 145 mortgage loans ranging in size from less than 1.0% to 7.9% of the pool, with the top 10 loans representing 33.0% of the pool. Twenty nine loans, representing 22.7% of the pool, have defeased and are secured by U.S. Government securities. Sixteen loans have been liquidated from the pool, resulting in aggregate realized losses of approximately $16.8 million. Currently one loan, representing less than 1% of the pool, is in special servicing. This loan was recently transferred into special servicing and potential losses from this loan can not be estimated at this time. Thirty one loans, representing 15.8% of the pool, are on the master servicer's watchlist. Moody's was provided with full-year 2005 operating results for approximately 84.4% of the pool. Moody's loan to value ratio is 80.9%, compared to 89.2% at Moody's last full review in Dec. 2005 and compared to 85.8% at securitization. Moody's is upgrading Class F due to increased credit support, improved overall pool performance and defeasance. Classes C, D and E were upgraded on Dec. 8, 2006 based on a Q tool based portfolio review. Moody's is downgrading Classes L and M due to realized losses from the specially serviced loans. The top three non-defeased loans represent 9.5% of the outstanding pool balance. The largest loan is the Covina Hills Mobile Home Country Club Loan at $20.2 million, 3.4% which is secured by a 500-pad mobile home park located approximately 25 miles east of Los Angeles in La Puente, California. The property is 100% occupied, the same as at last review. Moody's LTV is 72.8%, compared to 77.8% at last review. The second largest loan is the Liberty Fair Mall Loan at $19.5 million, 3.2% which is secured by a 435,000 square foot retail center located approximately 52 miles south of Roanoke in Martinsville, Virginia. The property is 91% leased, compared to 94% at last review. Major tenants include Belk, Sears and Kroger. The loan sponsor is Developers Diversified Realty Corporation, a publicly traded REIT. Moody's LTV is 86.7%, essentially the same as at last review. The third largest loan is the Wilshire Financial Loan at $17.7 million, 2.9%, which is secured by a 375,600 square foot office building located in Los Angeles, California. The property is 100.0% leased, essentially the same as at last review. Moody's LTV is 58.9%, compared to 63.8% at last review. The pool's collateral is a mix of multifamily, U.S. Government securities, retail, office, lodging, industrial and self storage, healthcare and CTL. The collateral properties are located in 32 states. The highest state concentrations are California, Texas, Virginia, Arizona and Maryland. All of the loans are fixed rate. KB HOMES: To Record at Least $235MM of Non-Cash Impairment Charges ------------------------------------------------------------------ KB Home anticipates recording a non-cash charge between $235 million to $285 million for inventory-related impairments and land option contract abandonments in the fourth quarter of its fiscal year ended Nov. 30, 2006. The non-cash charge related to the abandonment of certain land option contracts is expected by the company to total approximately $90 million in the fourth quarter. The process of assessing the recoverability of specific properties within its inventory has yet to be completed by the company. The company disclosed that the conclusion to record the charge was due to the change in market dynamics in the homebuilding industry, which caused a decline in the fair value of certain inventory positions and changes in the company's strategy concerning certain projects that no longer meet investment return hurdle rates. The company's management reviewed the conclusion with its Audit and Compliance Committee. KB Home's inventory consists of homes, lots and improvements in production and land under development. Restatement of Financial Statements The company's subcommittee of the audit and compliance committee and its independent legal counsel conducting an investigation into its past stock option practices had concluded that the company used incorrect measurement dates for financial reporting purposes for annual stock option grants for the fiscal years 1999 to 2005. The company expects the incremental non-cash compensation expense arising from the errors will not likely exceed an aggregate of $50 million and tax provision to increase. Total incremental non-cash compensation expense is estimated to be approximately $41 million with approximately $36 million attributable to periods covered by previously-issued financial statements and approximately $5 million attributable to future periods. Further, the company expects that the total related tax impact associated with Section 162(m) of the Internal Revenue Code will consist of a balance sheet-related component and an income tax provision impact. While the company has not yet finalized the amount of the tax effects, it currently estimates that its balance sheet will be impacted by an increase of approximately $60 million in liabilities with a corresponding decrease in stockholders' equity, and its income tax provision will increase by approximately $15 million. The company's management, in consultation with its audit and compliance committee and after discussion with Ernst & Young LLP, determined that the company's previously issued financial statements and any related reports of its independent registered public accounting firm for the fiscal years ended Nov. 30, 2003, 2004 and 2005, and the interim financial statements included in its quarterly reports on Form 10-Q for the quarters ended Feb. 28, 2006 and May 31, 2006, should no longer be relied upon and will be restated. Headquartered in Los Angeles, California, KB Home (NYSE: KBH) -- http://www.kbhome.com/-- is a homebuilder with domestic operating divisions in some of the fastest-growing regions and states: West Coast-California; Southwest-Arizona, Nevada and New Mexico; Central-Colorado, Illinois, Indiana and Texas; and Southeast-Florida, Georgia, North Carolina and South Carolina. Kaufman & Broad S.A., the Company's publicly traded French subsidiary, a homebuilding company in France. It also operates KB Home Mortgage Company, a full-service mortgage company for the convenience of its buyers. * * * As reported in the Troubled Company Reporter on Oct. 27, 2006, Standard & Poor's Ratings Services placed its BB+ corporate credit, BB+ senior unsecured, and BB- senior subordinated debt ratings on KB Home on CreditWatch with negative implications. The CreditWatch listings affect $1.65 billion of senior notes and $750 million of senior subordinated notes. As reported in the Troubled Company Reporter on Sept. 15, 2006, Fitch Ratings affirmed and revised the Rating Outlook to Stable from Positive for KB Home's Issuer Default Rating 'BB+', Senior unsecured debt and revolving credit facility 'BB+' and Senior subordinated debt 'BB-'. KUSHNER-LOCKE: Can Access Lender's Cash Collateral Until May 31 ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California allows The Kushner-Locke Company and its debtor-affiliates to use cash collateral securing repayment of their debt to JPMorgan Chase Bank and other lenders, from Dec. 1, 2006 through Jan. 31, 2006. The Debtors are permitted to use the cash collateral from Feb. 1, 2007, through May 31, 2007, if the lenders provide written consent in accordance with the submitted or a newly proposed budget. As reported in the Troubled Company Reporter on May 15, 2006, the Debtors owed the bank lenders approximately $67 million, plus around $8.9 million in accrued interest and other fees, when they filed for bankruptcy. The debt is secured by a lien on substantially all of the Debtors' assets. The Debtors will use the cash collateral in accordance with this budget http://researcharchives.com/t/s?1727 To provide the bank lenders with adequate protection, the Debtors grant replacement liens and security interests to the extent of any diminution in value of their collateral pursuant to Sections 361 and 363 of the Bankruptcy Code. Headquartered in Los Angeles, California, The Kushner-Locke Company is a low-budget movie production studio. The Company, along with its debtor-affiliates filed for chapter 11 protection on Nov. 21, 2001 (Bankr. C.D. Calif. Case No. 01-44828). Charles D. Axelrod, Esq., at Stutman, Treister & Glatt, P.C., and Mara Morner-Ritt, Esq., in Santa Monica, Calif., represent the Debtors in their restructuring efforts. LARGE SCALE: Court Confirms 1st Amended Joint Plan of Liquidation ----------------------------------------------------------------- The Honorable Michael S. McManus of the U.S. Bankruptcy Court for the Eastern District of California has confirmed the First Amended Joint Plan of Liquidation of Large Scale Biology Corporation, Large Scale Bioprocessing Inc., and Predictive Diagnostics Inc. Judge McManus determined that the Modified Plan satisfies the standards for confirmation under Section 1129(a) of the Bankruptcy Code. Liquidation of Assets The Debtors' assets will be combined and vested in the Consolidated Debtor on the plan effective date to make distributions under the Plan. The Consolidated Debtor, acting through a Plan Administrator, will liquidate assets of the Estates. Randy Sugarman was appointed Plan Administrator to oversee the liquidation and distribution of the Debtors' assets. Liquidation may include: (a) merger or consolidation of the Debtors, or any one of them, with one or more persons, (b) sale of all or part of the property of the Estates, (c) distribution of property to those having an interest in the property, or (d) the transfer of all or any part of the property of the Estates, or any one of them, to one or more entities, whether organized before or after the confirmation of the Plan. The Consolidated Debtor is authorized to pay all post-confirmation liquidation expenses without further Court order. As reported in the Troubled Company Reporter on July 4, 2006, on the plan effective date or as soon as practicable, the Consolidated Debtor will use cash on hand from the liquidation of assets to pay in full all allowed Administrative Claims, Professional Claims, Pre-petition Tax Claims, and Priority Claims. As funds become available that are not necessary to fund liquidation costs, the Consolidated Debtor will make distributions to other creditors and interest holders in the order of priority set forth in the Plan, which follows the priority scheme set forth in and required by the Bankruptcy Code. The Debtors anticipate that the liquidation will occur over the period of at least nine months to one year. Treatment of Claims The Debtors said that the secured claims of Kevin Ryan and Earl L. White, Ph.D., will be paid in full using proceeds of the sale of the collateral securing their obligations. Deficiencies will be treated as general unsecured claims. Seneca Meadows Corporate Center III is the landlord for premises known as Building #7 in Seneca Meadows Corporate Center in Germantown, Maryland, under a lease dated July 26, 2000, with Large Scale Biology, which includes a deposit in the form of a letter of credit. The Debtors say that Seneca Meadows will retain all rights to its collateral under the terms of the lease. Holders of General Unsecured Claims will have their claims paid or satisfied in full using unencumbered funds from the sale proceeds of the Debtors' assets after: * payment in full of Administrative Claims, Priority Claims, Pre-Petition Tax Claims, and Professional Claims; and * reservation of sufficient funds to pay for all post- confirmation liquidation expenses. The Debtors said that if there are sufficient unencumbered funds to do so, general unsecured claimants will be entitled to interest at the legal rate as of the effective date from the date the Debtors filed for bankruptcy until paid in full. Otherwise, holders will receive their pro rata share from the unencumbered funds. All warrants and stock options of Large Scale Biology, Large Scale Bioprocessing Inc., and Predictive Diagnostics Inc. will be cancelled pursuant to the Plan. Satisfied Claims The Debtors disclosed that the secured claim of Agility Capital LLC has been satisfied in full through a $650,000 payment using the proceeds of the sale of the Owensboro Facility and related assets, pursuant to a Court-approved settlement agreement between Agility and the Debtors. Kentucky Technology Inc., Robert Erwin, IRA, and Kevin Ryan, IRA's secured claims have also been satisfied in full using the proceeds of the sale of the Owensboro Facility and related assets. A full-text copy of the Debtors' First Amended Liquidation Plan is available for free at http://ResearchArchives.com/t/s?1731 Headquartered in Vacaville, California, Large Scale Biology Corporation -- http://www.lsbc.com/-- developed, manufactureed and sold plant-made pharmaceutical proteins and vaccines. LSBC and its debtor-affiliates filed for chapter 11 protection on Jan. 9, 2006. (Bankr. E.D. Calif. Case No. 06-20046). Paul J. Pascuzzi, Esq., at Felderstein Fitzgerald Willoughby & Pascuzzi, represent the Debtors. Donna T. Parkinson, Esq., in Sacramento, California, represents the Official Committee of Unsecured Creditors. At June 30, 2006, Large Scale Biology Corp.'s balance sheet showed total assets of $19,733,999 and total debts of $8,895,285. LEAP WIRELESS: Completes $31.8-Mil. Spectrum License Acquisition ---------------------------------------------------------------- Leap Wireless International Inc. has completed the acquisition of 13 spectrum licenses from Urban Comm-North Carolina Inc., Debtor-in-Possession, for $31.8 million in cash. The licenses, covering more than 4.9 million POPs, span markets across North and South Carolina. Leap currently offers its Cricket service and Jump Mobile service in Charlotte and the Triad area of North Carolina. Leap purchased 10 MHz of spectrum under the sale agreement in each of these markets: * North Carolina: Asheville-Hendersonville, Burlington, Goldsboro-Kinston, Greenville-Washington, New Bern, Raleigh-Durham, Roanoke Rapids and Rocky Mount-Wilson. * South Carolina: Florence, Myrtle Beach, Orangeburg, Sumter, and Charleston With the completion of this purchase, Leap owns wireless licenses covering approximately 9 million potential customers in North and South Carolina. "With the acquisition of these 13 spectrum licenses, we are well positioned to further expand our wireless services into new markets in North and South Carolina during 2007," said Doug Hutcheson, Leap's president and chief executive officer. "Adding Raleigh-Durham and the other new markets to our spectrum portfolio continues our clustering strategy implementation, which provides even more value to our customers. When coupled with our unlimited services for voice and the growing portfolio of data services, we believe the Carolinas offer another exciting opportunity for the business." About Leap Wireless Based in San Diego, California, Leap Wireless International, Inc., (NASDAQ:LEAP) -- http://www.leapwireless.com/-- is a customer- focused company providing innovative mobile wireless services targeted to meet the needs of customers under-served by traditional communications companies. With the value of unlimited wireless services as the foundation of its business, Leap pioneered both the Cricket(R) and Jump(TM) Mobile services. Through a variety of low, flat rate, service plans, Cricket service offers customers a choice of unlimited anytime local voice minutes, unlimited anytime domestic long distance voice minutes, unlimited text, instant and picture messaging and additional value-added services over a high-quality, all-digital CDMA network. Designed for the urban youth market, Jump Mobile is a unique prepaid wireless service that offers customers free unlimited incoming calls from anywhere with outgoing calls at an affordable 10 cents per minute and free incoming and outgoing text messaging. Both Cricket and Jump Mobile services are offered without long-term commitments or credit checks. * * * As reported in the Troubled Company Reporter on May 3, 2006, Standard & Poor's Ratings Services affirmed its 'B-' corporate credit and senior secured debt ratings on San Diego, California- based wireless carrier Leap Wireless International Inc., and removed them from CreditWatch. The outlook is stable. Total debt as of Dec. 31, 2005, was $594 million. LIME ENERGY: Posts $4.1 Mil. Net Loss in 2006 Third Quarter ----------------------------------------------------------- Lime Energy Company, fka Electric City Corp., has filed its quarterly financial statements for the three-month period ended Sept. 30, 2006. The company reported a $4,117,510 net loss on $2,130,158 of revenues for the quarterly period ended Sept. 30, 2006, compared to a net loss of $2,014,095 on $1,123,360 of total revenues in the same prior year period. Lime Energy's total revenue for the three-month period ended Sept. 30, 2006 increased $1,006,798 to $2,130,158, or 89.6%, as compared to $1,123,360 for the three month period ended Sept. 30, 2005. The increase was generated by its Energy Services segment, which was created with the acquisition of Parke effective June 30, 2006. Total revenue for the Energy Technology segment decreased slightly, from $1,123,000 to $1,110,000. Cost of sales for the three-month period ended Sept. 30, 2006 increased $394,673 to $1,592,613, or 32.9%, from $1,197,940 for the three-month period ended Sept. 30, 2005. The increase in cost of sales was due to the increase in sales. At Sept. 30, 2006, the company's balance sheet showed $27,548,721 in total assets, $6,411,855 in total liabilities, and $21,136,866 in stockholders' equity, compared to $17,098,974 in total assets, $12,721,337 in total liabilities, and $4,377,637 in stockholders' equity at Dec. 31, 2005. The company has experienced operating losses and negative cash flow from operations since inception and currently has an accumulated deficit. The company's management has recently raised additional funds and is continuing to work to improve profitability through efforts to expand its business in both current and new markets. A full-text copy of the company's financial statements for the quarterly period ended Sept. 30, 2006, is available for free at http://researcharchives.com/t/s?1724 Going Concern Doubt As reported in the Troubled Company Reporter on March 30, 2006, BDO Seidman, LLP, expressed substantial doubt about Electric City Corp.'s ability to continue as a going concern after auditing the company's financial statements for the years ended Dec. 31, 2005 and 2004. The auditing firm pointed to the company's recurring losses from operations. About Lime Energy Headquartered in Elk Grove Village, Illinois, Lime Energy Company, fka Electric City Corp. -- http://www.lime-energy.com/-- develops, manufactures and integrates energy savings technologies and performance monitoring systems. Lime Energy is comprised of three integrated operating companies that provide customers with total energy solutions. With thousands of customer installations across North America, Lime Energy has been reducing customers' operating costs for over 20 years. By linking its customers' sites, the Company is developing large-scale, dispatchable, demand response systems we call Virtual Negawatt Power Plan. The company is developing its first VNPP(R) development - a 50-Megawatt negative power system for ComEd in Northern Illinois, a second 27 Megawatt system with PacifiCorp in the Salt Lake City area, and a pilot program in Ontario, Canada with Enersource. LODGENET ENTERTAINMENT: Moody's Holds Corp. Family Rating at B1 --------------------------------------------------------------- Moody's revised LodgeNet's outlook to stable from positive, affirmed the corporate family rating, and put individual security ratings on review for downgrade, after the disclosure by LodgeNet of its acquisition of On Command for $380 million. LodgeNet is expected to pay $332 million is cash and expected to receive $23.35 million from the sale of its stock to a private investment firm to help finance this transaction. LodgeNet also has committed financing. Moody's will closely monitor the developments, including likely justice department scrutiny, and will comment further as appropriate. LodgeNet leverage is expected to increase to approximately 3.9x debt-to- EBITDA pro forma transaction, compared to 3.1x for the company prior to the announced acquisition. Moody's expect that additional financial risk for the company could be partially offset by the operational benefits of the combined entity. Assuming that all additional debt will be financed via increase in senior secured loans, ratings for individual securities could decline by one or two notches. If the financing for the acquisition was provided by additional subordinated notes, rather than secured debt, none of the individual securities ratings would likely change. LodgeNet's B1 corporate family rating continues to reflect significant exposure to the lodging industry's inherent cyclicality, seasonality and volatility, as well as the company's dependence on the quality of Hollywood product, extensive need for capital investment, and thin interest coverage after capital expenditures. The rating is supported by LodgeNet's large installed room base and the consequent advantages of scale, growing free cash flow, and diversification from the new revenues streams, such as from services to healthcare facilities and travel centers. These are the complete rating actions: Affirm: -- Corporate Family Rating B1 -- Probability of Default Rating B1 -- Outlook is Stable On Review for Downgrade: -- Senior Secured Revolver Ba1, LGD2, 16% -- Senior Secured Term Loan Ba1, LGD2, 16% -- 9.5% Senior Sub Notes, B2, LGD5, 72% LodgeNet Entertainment Corporation provides cable, video-on-demand and video game entertainment services to the lodging industry. LodgeNet maintains its headquarters in Sioux Falls, South Dakota. MICHAEL LEMBO: Case Summary & 3 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Michael R. Lembo, Jr., Esq. 575 Freetown Highway P.O. Box 8 Modena, NY 12548 Bankruptcy Case No.: 06-36329 Chapter 11 Petition Date: December 1, 2006 Court: Southern District of New York (Poughkeepsie) Judge: Cecelia G. Morris Debtor's Counsel: Lewis D. Wrobel, Esq. 12 Raymond Avenue Poughkeepsie, NY 12603 Tel: (845) 473-5411 Fax: (845) 473-3430 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's 3 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Distasi Moriello & Murphy Legal Fees $2,000 400 Upper North Road Rout 9W P.O. Box 915 Highland, NY 12528 Hanig, Handel & Associates Legal Services $1,333 22 Ibm Road, Suite 210 Poughkeepsie, NY 12601 Town of Plattekill Fine $1,100 1915 Route 44/55 Modena, NY 12548 MSC MEDICAL: Growth Plan Shortfalls Cue Moody's Negative Outlook ---------------------------------------------------------------- Moody's Investors Service affirmed the B3 Corporate Family Rating of MSC-Medical Services Company. The rating agency affirmed all other ratings. The rating outlook has been changed to negative from stable. Affirmed: -- $150 million Senior Secured Second Lien Notes, due 2011, rated B3, LGD3, 46%; -- Corporate Family Rating, rated B3; and, -- Probability of Default Rating, rated B3. Changed the outlook to negative from stable. The company's rating outlook is negative because it has not met the business plan and strategies for growth set forth at the time of the initial rating on the basis of top-line revenues, gross margins and EBITDA generation. The outlook or ratings could improve if the company is able to sustain top-line revenue growth achieved during 2006 year-to-date, stabilize its collection process and improve the turnover in its accounts receivables base, resulting in consistently positive free cash flow, quarter-to-quarter. The outlook or ratings could be upgraded if the company is able to consistently improve gross and EBITDA margins such that interest coverage exceeds 1.2 times with resulting, sustained, positive free cash flow to total debt on the order of 3% to 5%. MSC-Medical Services Company, based in Jacksonville, Florida, is one of the largest independent procurement providers of ancillary healthcare products and services to the U.S worker's compensation industry. The firm arranges for the provision of medical products and services to injured workers on behalf of insurance companies, third-party administrators, self-insured corporations, and government entities. For the twelve months ended Sept. 30, 2006 the company generated $320 million in revenue. MSDWMC OWNER: Losses Cue Moody's to Cut Ratings on 5 Note Classes ----------------------------------------------------------------- Moody's Investors Service downgraded five classes and confirmed one class of notes issued by MSDWMC Owner Trust 2000-F1. These are the rating actions: * MSDWMC Owner Trust 2000-F1 -- $11,706,000 Class B Notes, rated A3, confirmed; -- $9,950,000 Class C Notes, downgraded from Baa3 to Ba1; -- $2,927,000 Class D Notes, downgraded from Ba1 to Ba3; -- $9,365,000 Class E Notes, downgraded from B1 to B3; -- $1,756,000 Class F Notes, downgraded from B2 to Caa1; and. -- $4,683,000 Class G Notes, downgraded from Caa2 to Ca. The ratings actions are a result of recent developments in the collateral pool, including losses realized several months ago, as well as further losses expected in relation to an obligor in receivership. The actions reflect the degree to which these developments impact the credit quality of the Notes. The Class A notes are rated Aaa based on an insurance policy from MBIA Insurance Corp. and are not affected by the ratings action. The underlying securitized loans were originated by Franchise Finance Corporation of America and Morgan Stanley Dean Witter Mortgage Capital. FFCA was acquired by GE Capital and is now GE Capital Franchise Finance. MSDWMC originated loans through American Commercial Capital. WFCC currently services the MSDWMC originated loans while GECFF is the servicer on FFCA originated loans. NATIONAL LAMPOON: Jeff Gonzalez Resigns as Chief Financial Officer ------------------------------------------------------------------ National Lampoon Inc.'s interim chief financial officer, Jeff Gonzalez, has submitted his resignation effective Dec. 15, 2006. Mr. Gonzalez began providing services on April 10, 2006, to the company as its principal accounting officer pursuant to an agreement entered into with Shorelight Partners Inc., a management consulting firm. Mr. Gonzalez is a principal in Shorelight Partners, Inc. and has been employed by it since September 2002. Mr. Gonzalez was the chief financial officer of Interplay, a publicly traded video game software publisher, which he joined in 2001. From 2000 to 2001, Mr. Gonzalez was the chief financial officer for 2k-Media USA, Inc., a subsidiary of a German motion picture production and distribution company. From 1998 to 2000, Mr. Gonzalez was the chief financial officer for Trimark Holdings, Inc., a publicly traded film distribution and production company. National Lampoon Inc. -- http://www.nationallampoon.com/-- (AMEX:NLN) fka J2 Communications Inc. is active in a broad array of entertainment segments, including feature films, television programming, interactive entertainment, home video, audio CDs and book publishing. The Company owns interests in all major National Lampoon properties, including National Lampoon's Animal House, the National Lampoon Vacation series and National Lampoon's van Wilder. The National Lampoon Network serves over 600 colleges and universities throughout the U.S. and reaches as many as 4.8 million 18-to-24-year-old college students. It has four operating divisions: National Lampoon Network, Entertainment Division, Publishing Division and Licensing Division. J2 Communications Inc. was engaged in the acquisition, production and distribution of videocassette programs for retail sale. In 1991, J2 acquired all of the outstanding shares of National Lampoon, Inc., and subsequent to J2's acquisition of NLI, it de-emphasized its videocassette business and publishing operations and began to focus on exploitation of the National Lampoon(TM) trademark. J2 reincorporated in Delaware under the name National Lampoon, Inc., in November 2002. Going Concern Doubt Stonefield Josephson, Inc. expressed substantial doubt about National Lampoon, Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended July 31, 2006. The firm pointed to the company's net loss and negative working capital. NORD RESOURCES: Sept. 30 Balance Sheet Upside-Down by $4.3 Million ------------------------------------------------------------------ Nord Resources' Sept. 30, 2006 balance sheet showed $4.6 million in total assets and $8.9 million in total liabilities, resulting in a $4.3 million total stockholders' deficit. The company's balance sheet also showed strained liquidity with $1.9 million in total current assets available to pay $8.7 million in total current liabilities. The company reported a $354,245 net loss for the third quarter ended Sept. 30, 2006, compared with a $871,752 net loss for the same period in 2005. The company did not have any sales during the three and nine months ended Sept. 30, 2006 and 2005 as the Johnson Camp mine was on a care and maintenance program during said periods. The decrease in net loss is mainly due to a $1.9 million miscellaneous income from the settlement agreement with Titanium Resource Group in August 2006 in connection with the sale of the company's remaining 13/15 fractional interest in SRL Acquisition No. 1 Limited, partly offset by the increase in operating expenses from $643,573 for the three months ended Sept. 30, 2005, to $2 million for the three months ended Sept. 30, 2006. The increase in operating expenses is due primarily to a $450,362 increase in professional fees related to the preparation of the company's recent SEC filings under the Exchange Act, other activities undertaken by the company to bring the Johnson Camp mine into production and the negotiation and due diligence investigations relating the acquisition of the company by Platinum Diversified Mining Inc. The acquisition of the company has been approved by the shareholders of Platinum Diversified Mining Inc. Full-text copies of the company's consolidated financial statements are available for free at: http://researcharchives.com/t/s?171c Going Concern Doubt As reported in Aug. 3, 2006, Mayer Hoffman McCann PC expressed substantial doubt about Nord's ability to continue as a going concern after it audited the company's financial statements for the years ended Dec. 31, 2005 and 2004. The auditing firm pointed to the company's significant operating losses. Nord Resources Corporation (Pink Sheets: NRDS) -- http://www.nordresources.com/-- is an emerging copper producer which controls a 100% interest in the Johnson Camp SX-EW copper project in Arizona. Based in Tucson, Nord's near term objective is to resume mining and leaching operations at the Johnson Camp mine, which has been on care and maintenance status since August 2003. Nord has decided to proceed with its mine plan bases on an updated feasibility study that was completed in October 2005, subject to raising sufficient financing. NORD RESOURCES: Platinum Shareholders Approve Merger Transaction ---------------------------------------------------------------- Mr. Ronald A. Hirsch, Chairman of the Board of Directors of Nord Resources Corporation, disclosed that Platinum Diversified Mining Inc.'s shareholders have approved Platinum's proposed acquisition of Nord in the all-cash merger transaction. The extraordinary meeting of Platinum's shareholders was reconvened and held at 6:00 p.m. (United Kingdom time) on Dec. 12, 2006. Completion of the merger and re-admission of the issued share capital of Platinum to trading on AIM remain conditional, among other things, on the approval of the merger agreement and the merger by Nord's stockholders at the special meeting of stockholders due to be held at 620 East Wetmore Road, Tucson, Arizona 85705 on Dec. 20, 2006, at 10:00 a.m. Arizona time. The Merger Agreement The merger will be completed pursuant to an agreement and plan of merger dated Oct. 23, 2006 between Nord, Platinum, Platinum Diversified Mining USA, Inc., and PDM Merger Corp. PDM Merger is a wholly-owned subsidiary of Platinum USA, which in turn is a wholly-owned subsidiary of Platinum. If the merger is completed, PDM Merger will merge with and into Nord, with Nord continuing as the surviving corporation and a wholly-owned subsidiary of Platinum USA. The merger has been approved by a special committee of Nord's board of directors comprised of independent directors who considered a fairness opinion of an independent financial advisor in reaching their determination. Upon completion of the merger, stockholders of Nord will receive: * a cash amount based on the aggregate merger consideration to be paid Platinum net of a holdback of $3 million. This cash amount is referred to as the "per share merger consideration". Nord estimates that the per share merger consideration will equal $1.20 per share. Payment of the per share merger consideration will be made upon consummation of the merger; and * a contingent right to receive a pro rata share of the amount remaining, if any, of the $3 million holdback amount after the expiry of a six month holdback period, which is referred to as the "per share net holdback consideration". Nord estimates that the per share net holdback consideration will equal $0.07 per share, prior to deduction of fees and expenses associated with the escrow arrangement for the holdback, if there are no claims for damages made against the holdback amount. Payment of the per share net holdback consideration will be made upon expiry of the holdback or upon resolution of all claims for damages, if there are any claims for damages outstanding when the holdback period expires. Accordingly, stockholders of Nord will receive an aggregate of $1.27 per share, prior to deduction of fees and expenses associated with the escrow arrangement for the holdback, if there are no claims for damages made during the holdback period. Going Concern Doubt As reported in Aug. 3, 2006, Mayer Hoffman McCann PC expressed substantial doubt about Nord's ability to continue as a going concern after it audited the company's financial statements for the years ended Dec. 31, 2005 and 2004. The auditing firm pointed to the company's significant operating losses. Nord Resources Corporation (Pink Sheets: NRDS) -- http://www.nordresources.com/-- is an emerging copper producer which controls a 100% interest in the Johnson Camp SX-EW copper project in Arizona. Based in Tucson, Nord's near term objective is to resume mining and leaching operations at the Johnson Camp mine, which has been on care and maintenance status since August 2003. Nord has decided to proceed with its mine plan bases on an updated feasibility study that was completed in October 2005, subject to raising sufficient financing. ORANGE COUNTY: Robert Franz Appointed as Deputy CEO/CFO ------------------------------------------------------- Orange County executive officer Thomas G. Mauk has appointed Robert Franz as Deputy chief executive officer/chief financial officer for the County of Orange. The appointment is effective Jan. 8, 2007. Mr. Franz has been the Director of Administrative Services for the City of Glendale since 1998. His responsibilities there included Finance, Budget, Human Resources and Labor Relations, Risk Management, Purchasing and Graphics. Before joining the City of Glendale, he also served in key management positions in the Cities of Huntington Beach and Montebello. In addition, Mr. Franz has more than 35 years of experience as a public sector finance professional. He earned his Bachelor of Arts degree in Mathematics from Occidental College and his Master's Degree in Business Administration from the University of Southern California. Mr. Franz is a resident of the City of Huntington Beach. "This position is the cornerstone of effective, financial management for the County and we are fortunate to have a solid professional like Franz joining our team," Mr. Mauk said. "He has a proven track record for accomplishing the most challenging goals and successfully developing long range financial plans." Orange County -- http://www.oc.ca.gov/-- in located in California. * * * Moody's Investors Service affirmed March 28, 2005, the Ba1 rating on Orange County Housing Finance Authority's $7.5 million of outstanding Multifamily Housing Revenue bonds, Series 2000A (Maitland Oaks and Hollowbrook Apartments). Moody's says the outlook on the bonds remains negative. ORBITAL SCIENCES: Earns $8.6 Million in 2006 Third Quarter ---------------------------------------------------------- Orbital Sciences Corp. reported preliminary financial results for the third quarter and first nine months of 2006. Net income for the third quarter of 2006 was $8.6 million, up from $6.8 million in the third quarter of 2005. Net income for the first nine months of 2006 was $27.2 million, compared to $20.5 million in the same period of 2005. Orbital's third quarter revenues increased 24% to $197.7 million in 2006, compared to $159.3 million in 2005. The company's third quarter operating income rose 25% to $15.3 million in 2006, as compared to $12.2 million in 2005. The third quarter increase in revenues was primarily due to a 58% increase in satellites and space systems segment revenues, driven by growth in the communications satellites product line related to progress on several new satellite contracts awarded in 2005. Launch vehicles segment revenues decreased 11% due to lower revenues from the interceptor launch vehicle and target vehicle product lines, partially offset by higher revenues from the space launch vehicle product line. Transportation management systems segment revenues increased 46% largely driven by work on several new contracts started in 2005 and early 2006. Commenting on Orbital's third quarter 2006 results, Mr. David W. Thompson, Chairman and Chief Executive Officer, said, "The company generated strong across-the-board financial results this past quarter. Of particular significance were robust revenue growth and profit margin expansion in our satellite business, continued solid free cash flow, and exceptional new orders and contract backlog." For the first nine months of 2006, Orbital reported $586.8 million in revenues, up 16% over the same period last year, primarily due to a 38% increase in satellites and space systems segment revenues that was driven by growth in the communications satellites product line. Launch vehicles segment revenues decreased 7% primarily due to lower revenues from the interceptor and target vehicle product lines, partially offset by higher revenues from the space launch vehicle product line. Transportation management systems segment revenues increased 36% largely driven by the work on several new contracts started in 2005 and early 2006. At Sept. 30, 2006, the company's balance sheet showed $746,409 in total assets, $318,833 in total liabilities, and $427,576 in total stockholders' equity. The company reported free cash flow of $21.0 million for the third quarter of 2006 and $75.2 million for the first nine months of 2006. Orbital's unrestricted cash balance increased to $233.0 million as of Sept. 30, 2006. In the first nine months of 2006, Orbital repurchased 1.1 million shares of its common stock for $16.2 million as part of the company's 12-month, $50 million securities repurchase program which began in April 2006. Stock-Based Compensation Review In the third quarter, the company's Board of Directors established a special committee to conduct a review of stock option and restricted stock unit grants and related procedures dating from the time of the company's initial public offering in 1990 to the present. The special committee is being assisted by independent legal counsel and accounting consultants. This company-initiated review is substantially complete and the special committee has concluded that there was no fraud or intentional misconduct in its past stock-based compensation practices. As a result of the stock-based compensation review, Orbital has determined that incorrect accounting measurement dates were used for a number of grants. Accordingly, the company expects to revise prior period financial statements to record non-cash compensation expenses that should have been recorded with respect to the misdated options. Based on Orbital's current analysis and assessment, the company does not expect that such adjustments will be material to any of its current financial statements for periods subsequent to the year ended Dec. 31, 2000. Since the adjustments to the current financial statements are not expected to be material, the company does not expect to file any amended Forms 10-Q or Forms 10-K for prior periods. The revised prior period financial statements will be reported when the company files its third quarter 2006 Form 10- Q and 2006 Form 10-K. The company expects to record pre-tax compensation charges of approximately $300,000 in 2006, a total of about $2.5 million in the five-year period 2001 through 2005 and a total of about $11.5 million for all periods prior to 2001. Orbital is in the process of assessing the impact of this matter on its system of internal controls. About Orbital Sciences Orbital Sciences Corp. (NYSE: ORB) -- http://www.orbital.com/-- develops and manufactures small rockets and space systems for commercial, military and civil government customers. he company's primary products are satellites and launch vehicles, including low-orbit, geosynchronous-orbit and planetary spacecraft for communications, remote sensing, scientific and defense missions; ground- and air-launched rockets that deliver satellites into orbit; and missile defense systems that are used as interceptor and target vehicles. Orbital also offers space-related technical services to government agencies and develops and builds satellite- based transportation management systems for public transit agencies and private vehicle fleet operators. * * * As reported in the Troubled Company Reporter on Dec. 12, 2006, Standard & Poor's Ratings Services assigned its B+ rating to the company's $143.8 million 2.4375% convertible subordinated notes. due 2027. PANTRY INC: Earns $89.2 Million in Fiscal Year Ended September 28 ----------------------------------------------------------------- The Pantry Inc. reported net income of $89.2 million for the fiscal year ended Sept. 28, 2006, compared with $57.8 million for fiscal year ended Sept. 29, 2005. The increase is primarily attributable to increased income from operations. Total revenue for fiscal 2006 was $6 billion, compared with $4.4 billion for fiscal 2005, an increase of $1.5 billion, or 34.6%. The increase in total revenue is primarily due to a 21% increase in the average retail price of gasoline gallons sold, the revenue of stores acquired in fiscal 2006 and the effect of a full year of revenue from 2005 acquisitions of $776.1 million and comparable store increases in merchandise sales of $57 million and in gasoline gallons of 43.2 million. Total gross profit was $799.1 million for fiscal 2006, compared with $663.1 million for fiscal 2005, an increase of $136 million, or 20.5%. The increase is primarily attributable to the gross profit contribution of stores acquired in fiscal 2006 and the effect of a full year of gross profit contribution from 2005 acquisitions of $80.7 million, the increase in the company's gasoline gross profit per gallon and its comparable store volume increases. Income from operations for fiscal 2006 was $202 million compared with $148.5 million for fiscal 2005, an increase of $53.5 million, or 36%. EBITDA for fiscal 2006 was $283.8 million compared with $215.7 million for fiscal 2005, an increase of $68.1 million, or 31.6%. The company's debt, at Sept. 28, 2006, consisted primarily of $204 million in loans under its senior credit facility, $250 million of outstanding 7.75% senior subordinated notes, $244.1 million of outstanding lease finance obligations and $150 million of outstanding convertible notes. At Sept. 28, 2006, the company's balance sheet showed $1.587 billion in total assets, $1.250 billion in total liabilities, and $337 million in total stockholders' equity. A full text-copy of the company's annual report on Form 10-K may be viewed at no charge at http://ResearchArchives.com/t/s?1716 Headquartered in Sanford, North Carolina, The Pantry, Inc. (NASDAQ: PTRY) -- http://www.thepantry.com/--operates convenience store chains in the southeastern United States. As of June 29, 2006, the Company operated 1,499 stores in eleven states under select banners including Kangaroo Express(SM), its primary operating banner. * * * As reported in the Troubled Company Reporter on Oct. 30, 2006, Moody's Investors Service confirmed The Pantry Inc.'s B1 corporate family rating in connection with the rating agency's implementation of its new Probability-of-Default and Loss-Given- Default rating methodology. In May 2006, Standard & Poor's Ratings Services raised its corporate credit rating on The Pantry Inc. to 'BB-' from 'B+'. At the same time, the bank loan rating was raised to 'BB' from 'BB-', with the recovery rating unchanged at '1', indicating expectations for full recovery of principal in the event of a default. The subordinated debt rating was also raised to 'B' from 'B-'. The outlook was stable. PATH 1: September 30 Balance Sheet Upside Down by $3.7 Million -------------------------------------------------------------- Path 1 Network Technologies, Inc., has filed its quarterly financial statements for the quarterly period ended Sept. 30, 2006. At Sept. 30, 2006, the company's balance sheet showed $2,613,000 in total assets and $6,326,000 in total liabilities, resulting in a $3,713,000 in stockholders' deficit. The company reported $3,883,000 in total assets, $4,540,000 in total liabilities, and $657,000 in stockholders' at Dec. 31, 2005. The company's September 30 balance sheet also showed strained liquidity with $1,539,000 in total current assets available to pay $3,395,000 in total current liabilities. The company incurred a $1,142,000 net loss on $931,000 of revenues for the quarterly period ended Sept. 30, 2006, compared to a net loss of $3,010,000 on $404,000 of total revenues for the same period in 2005. From Jan. 30, 1998 through Sept. 30, 2006, Path 1 has accumulated a total deficit of approximately $60 million. As of Sept. 30, 2006, the company had negative working capital of approximately $1.9 million and cash and cash equivalents of $389,000. The company has also completed a $1 million non-convertible revolving note financing with Laurus Master Fund Ltd., of which the company drew down $916,000. Pursuant to the agreement, Laurus granted a loan to Path 1 of $600,000 in the form of an advance in excess of the formula amount of the revolving note which is to be repaid by Jan. 1, 2007. The company relates that given its projected cash burn rate, it will be required to raise additional capital in the very near term. The company is currently pursuing efforts to raise additional capital and considering the sale of certain assets. A full-text copy of the company's financial statements for the quarterly period ended Sept. 30, 2006, is available for free at http://researcharchives.com/t/s?1723 Going Concern Doubt Swenson Advisors, LLP, in New York, raised substantial doubt about Path 1 Network Technologies Inc.'s ability to continue as a going concern after auditing the Company's consolidated financial statements for the year ended Dec. 31, 2005. The auditor pointed to the Company's operating losses and inability to raise additional capital. About Path 1 Based in San Diego, California, Path 1 Network Technologies Inc. -- http://www.path1.com/-- provides a variety of software and services used for real-time, high-quality audio and video-on- demand distribution over Internet Protocol. Its Cx1000 broadcast video gateway is used to transmit and receive ASI and SDI video images over FastE and Gigabit Ethernet network interfaces. Paulson Capital owns almost 14% of it. PEABODY ENERGY: Moody's Rates $500-Mil. Junior Debentures at Ba2 ---------------------------------------------------------------- Moody's Investors Service assigned Peabody Energy Corporation's proposed $500 million convertible junior subordinated debentures a rating of Ba2. Moody's also revised Peabody's outlook to stable from negative. At the same time, Moody's affirmed Peabody's Ba1 corporate family rating and the Ba1 senior unsecured rating on its existing revolver, term loan and notes. The ratings reflect the overall probability of default of the company, to which Moody's affirms a PDR of Ba1. The convertible junior subordinated debentures rating of Ba2 reflects a loss given default of LGD6, 95%. The senior unsecured rating of Ba1 reflects a loss given default of LGD3, 47%. Moody's also affirmed Peabody's SGL-1 Speculative Grade Liquidity rating. The revision in outlook reflects the 75% equity component that Moody's credits to the "Basket D" convertible junior subordinated debentures, and the related notional reduction in debt. The proceeds of the $500 million Debentures, along with proceeds of the recent $900 million senior unsecured notes and drawings under the company's term loan, are being used to provide the long term funding of Peabody's recent acquisition of Australian coal miner, Excel Coal Limited, for $1.9 billion, including assumption of debt and fees. The acquisition of Excel will significantly expand Peabody's operation in Australia and its penetration of both the export metallurgical and thermal coal markets. Excel expects to increase its production from about 6 million tons currently to 15 to 20 million tons in 2007 and 2008. The Ba1 corporate family rating reflects Peabody's: -- favorable debt to EBITDA and good earnings ratios; -- diversified low-cost operations; -- extensive and geographically diversified reserves of high quality coal; -- strong management; and, -- portfolio of long-term coal supply agreements with a large number of electricity generation customers. However, the rating also reflects the significant increase in debt to fund the Excel acquisition, which increases Peabody's pro forma Sept. 30, 2006 debt to EBITDA ratio to 3.4x from 2.3x, and, giving equity credit of $375 million to the debentures, the debt to capitalization ratio to 55.8% from 49.9%. The rating also considers the volatile nature of the coal mining business, and operating and development cost pressures that could continue to cons PLASTIPAK HOLDINGS: Moody's Shifts Outlook to Positive from Stable ------------------------------------------------------------------ Moody's Investors Service changed the outlook for the ratings of Plastipak Holdings, Inc. to positive from stable and concurrently affirmed existing ratings including the B2 Corporate Family Rating and the B3, LDG5, 77% for the $250 million guaranteed senior unsecured notes due 2015. The change of the ratings outlook to positive from stable acknowledges the positive momentum the company has been experiencing during a challenging period for the industry. Despite weak results in the first quarter of 2006, primarily because of softness in the North American operations and poor performance in Brazil, Plastipak rebounded and achieved strong consolidated operational results including good results in its small subsidiaries - Clean Tech and Whiteline Express, Ltd. The positive outlook reflects an expectation during the near to intermediate term of continued reduction in financial leverage and improvement in cash flow generation, which has been delayed due to the company's spending on growth initiatives. There is an expectation of further improvement in its revenue mix as the company slowly reduces reliance on its more commoditized product offering. The outlook also recognizes the realized benefits from the integration of the LuxPET acquisition, the recently successful renegotiation of significant customer contracts, and the maintenance of solid liquidity. An upgrade in the ratings could be considered if the company sustains and improves its financial profile such that free cash flow is positive and secondarily, FCF to debt migrates into the low-single digits. The company should also maintain EBIT margins in the mid-single digits, and EBIT interest coverage of at least 1.5x. Absent an exogenous event, a change in the ratings outlook back to stable is not likely to take place in the short to intermediate term. However, should Plastipak evidence a weakened performance and an inability to generate positive free cash flow and maintain interest coverage of at least 1 time in the medium term, the outlook could revert back to stable. Additionally, a debt financed acquisition resulting in a sizeable increase of leverage or a significant unexpected use of cash could negatively impact the ratings outlook. Moody's also notes that the rating of the existing senior notes is highly sensitive to any incremental increase in senior secured debt. The affirmation of Plastipak's B2 CFR reflects the company's good market position measured by its size, diversified product offering, and strong relationships with multi-national and well- established customers. Regardless of higher resin costs and some volatility in performance from quarter to quarter, the company continues to perform according to expectations. However, the company's credit metrics remain modest as evidenced by weak interest coverage and negative free cash flow, while acquisition risk remains a concern. Moody's affirmed these ratings: -- B3 rating for the $250 million guaranteed senior unsecured notes due 2015, LGD-5, 77%; -- B2 Corporate Family Rating; and, -- B2 Probability of Default Rating. The ratings outlook changed to positive from stable. Plastipak Holdings, Inc. is a privately held leading manufacturer of plastic packaging containers used by branded companies in the beverage, food, personal care, industrial, and automotive industries worldwide. Headquartered in Plymouth, Michigan, Plastipak Holdings, Inc. had revenues of roughly $1.43 billion for the twelve months ended July 29, 2006.s PREMIER DEVELOPMENT: Inks Pact with Adam Barnett to Settle Suit --------------------------------------------------------------- Premier Development & Investment Inc. entered, on Dec. 12, 2006, into a confidential settlement agreement and release with Adam Barnett, who had previously filed a civil lawsuit against the company and several other defendants. Mr. Barnett filed on Nov. 9, 2005, a civil suit against the company, its wholly owned subsidiary, Players Grille Inc., Stag Financial Group Inc., Pegasus Air Group Inc., and Sitra Oil & Gas Inc., seeking unspecified damages for breaching alleged but unspecified "verbal contracts." Under the terms of the agreement, Premier will: * Premier will transfer Players Grille's assets and liabilities to Mr. Barnett's designee, Restaurant Holdings LLC. Premier estimates these assets and liabilities to be currently valued at approximately $750,000 and $300,000, respectively; * Premier will transfer to Mr. Barnett any and all claims, judgments, and remaining legal fees retainers in the case styled Premier Development & Investment Inc. v. Equitilink L.L.C., James J. Mahoney, Thomas M. Mahoney, and Shamrock Holdings (Civil Action No. 3:04-CV-0405-L in the U.S. District Court, Northern District of Texas, Dallas Division), which represents an off balance sheet asset of approximately of $876,000. * Mr. Barnett will release and waive any claims he may or may not have in Coconut Grove Group Ltd. and the disputed 20% interest in Coconut Grove Group Ltd. will be the sole property of Premier; * Mr. Barnett will cause his employee Victoria Wright to return physical possession and waive any and all claims to ownership to the hijacked Internet domain http://www.premierdev.com/ Mr. Barnett will retain possession and Premier waives any and all claims to ownership to the hijacked Internet domain http://www.playersgrille.com/ * Mr. Barnett will waive all rights to any securities of Premier including common and preferred equities, options, warrants, rights, or derivatives; * Mr. Barnett will never buy, sell, trade, short sell, promote, or recommend trading in any securities of Premier. Furthermore, Mr. Barnett and his agents will return to Premier any securities presently in their possession. Any securities recovered from Mr. Barnett and his agents, if any, will be retired and returned to Premier's treasury; and * A mutual and comprehensive global release of any and all claims and liabilities between Mr. Barnett and all defendants in this matter, thereby concluding any and all relationships, real or imagined, by and among Mr. Barnett, Premier, and all defendants. Premier will be taking an estimated one-time write-down of approximately $1,000,000 in the current fiscal quarter ending Dec. 31, 2006, to account for the transfer of assets and related costs. Including this pending write-down, Premier has suffered approximately $2.6 million in losses related to Mr. Barnett over the past two fiscal years. Management estimates that Premier will have approximately zero asset while overall current liabilities (after giving effect to additional legal fees and the transfer of the Players Grille liabilities to Mr. Barnett in this settlement) of approximately $1,000,000. Management says stockholders' equity will most likely be reduced to a deficit between $1,200,000 to $1,500,000. Premier is no longer involved in any legal proceedings. About Premier Development & Investment Premier Development & Investment Inc., is a publicly held developer and operator of theme-based restaurant and bar concepts. These concepts are enveloped internally and through partnerships with other restaurant developers with the intent of building them into full-fledged chains and franchise opportunities. Premier owned and operated the Player's Grille Restaurant and Bar(TM), a casual dining sports-themed concept based in Florida. Going Concern Doubt Baumann, Raymondo & Company PA in Tampa, Fla., raised substantial doubt about Premier Development & Investment Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2005. The auditing firm pointed to the company's operating losses, working capital deficit, and additional funding to implement its business plan. PREMIER DEVELOPMENT: May Wind Up Business and Delist Shares ----------------------------------------------------------- Premier Development & Investment Inc.'s board of directors met with its controlling shareholders on Dec. 1, 2006, to discuss and pass potential resolutions related to: (a) voluntary discontinuing its Securities and Exchange Commission filing requirements, (b) voluntary delisting its common stock from the public marketplace in a "going private" transaction, (c) terminating operations at its wholly owned subsidiary, Players Grille Inc., and (d) voluntary dissolving the company and the winding up its business activities and existence as a Nevada corporation. This meeting was adjourned without any actions taken to allow its management to attempt to salvage Premier. About Premier Development & Investment Premier Development & Investment Inc. is a publicly held developer and operator of theme-based restaurant and bar concepts. These concepts are enveloped internally and through partnerships with other restaurant developers with the intent of building them into full-fledged chains and franchise opportunities. Premier owned and operated the Player's Grille Restaurant and Bar(TM), a casual dining sports-themed concept based in Florida. Going Concern Doubt Baumann, Raymondo & Company PA in Tampa, Fla., raised substantial doubt about Premier Development & Investment Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2005. The auditing firm pointed to the company's operating losses, working capital deficit, and additional funding to implement its business plan. REFCO INC: Judge Drain Confirms Modified Joint Chapter 11 Plan -------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York confirmed Dec. 15 the Modified Joint Chapter 11 Plan of Refco Inc. and certain of its direct and indirect subsidiaries, including Refco Capital Markets, Ltd., and Refco F/X Associates LLC, enabling the companies' expeditious completion of an orderly wind- up of their businesses. "We are delighted to have achieved this milestone," said Harrison J. Goldin, Refco's chief executive officer. "It represents the culmination of an arduous process, but provides the optimal outcome for all involved." Marc S. Kirschner, the Chapter 11 Trustee for Refco Capital Markets added, "We are committed to expediting the consummation of the Plan and anticipate making a substantial distribution to creditors before year end." The Plan, which is premised on a series of interdependent settlements and compromises, was supported by all the companies' major constituencies, including both official committees of unsecured creditors, secured lenders, bondholders, certain customer groups and certain former equity holders; and it represents the culmination over just 14 months of protracted negotiations in one of the most complex bankruptcy cases in history. Under the terms of the settlements which form the basis for the Plan, secured lenders who were owed $717.7 million were paid in full in cash prior to confirmation of the Plan; bondholders are expected to receive 83.4 cents on the dollar for their claims; Refco Capital Markets' securities customers are expected to receive approximately 85.6 cents on the dollar for their claims; and general unsecured creditors are expected to receive between 23 and 37.5 cents on the dollar for their claims. In addition, shareholders and creditors of the company will have the opportunity to participate in recoveries obtained by both the Litigation Trust and Private Actions Trust, which will hold certain litigation claims. "It is a tribute to the excellent and focused job done by the professionals representing all parties that a consensual plan could be confirmed in such a short time in such an exceptionally complex and highly litigious case" said J. Gregory St. Clair, an attorney with the law firm of Skadden, Arps, Slate, Meagher & Flom LLP, which represents Refco. Mr. St. Clair added that he expected the agreements outlined in the Plan to be effective by the end of the year. About Refco Inc. Based in New York, Refco Inc. (OTC: RFXCQ) -- http://www.refco.com/-- is a diversified financial services organization with operations in 14 countries and an extensive global institutional and retail client base. Refco's worldwide subsidiaries are members of principal U.S. and international exchanges, and are among the most active members of futures exchanges in Chicago, New York, London and Singapore. In addition to its futures brokerage activities, Refco is a major broker of cash market products, including foreign exchange, foreign exchange options, government securities, domestic and international equities, emerging market debt, and OTC financial and commodity products. Refco is one of the largest global clearing firms for derivatives. The Company and 23 of its affiliates filed for chapter 11 protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Luc A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represents the Official Committee of Unsecured Creditors. Refco reported US$16.5 billion in assets and $16.8 billion in debts to the Bankruptcy Court on the first day of its chapter 11 cases. On Oct. 6, 2006, the Debtors filed their Amended Plan and Disclosure Statement. On Oct. 16, 2006, the gave its tentative approval on the Disclosure Statement and on Oct. 20, 2006, the Court Clerk entered the written disclosure statement order. The hearing to consider confirmation of Refco, Inc., and its debtor-affiliates' plan is set for Dec. 15, 2006. Objections to the plan, if any, must be in by Dec. 1, 2006. Refco LLC, an affiliate, filed for chapter 7 protection on Nov. 25, 2005 (Bankr. S.D.N.Y. Case No. 05-60134). Refco, LLC, is a regulated commodity futures company that has businesses in the United States, London, Asia and Canada. Refco, LLC, filed for bankruptcy protection in order to consummate the sale of substantially all of its assets to Man Financial Inc., a wholly owned subsidiary of Man Group plc. Albert Togut, the chapter 7 trustee, is represented by Togut, Segal & Segal LLP. On April 13, 2006, the Court appointed Marc S. Kirschner as Refco Capital Markets Ltd.'s chapter 11 trustee. Mr. Kirschner is represented by Bingham McCutchen LLP. RCM is Refco's operating subsidiary based in Bermuda. Three more affiliates of Refco, Westminster-Refco Management LLC, Refco Managed Futures LLC, and Lind-Waldock Securities LLC, filed for chapter 11 protection on June 6, 2006 (Bankr. S.D.N.Y. Case Nos. 06-11260 through 06-11262). Refco Commodity Management, Inc., formerly known as CIS Investments, Inc., a debtor-affiliate of Refco Inc., filed for chapter 11 protection on Oct. 16, 2006 (Bankr. S.D.N.Y. Case No. 06-12436). RCMI's exclusive period to file a chapter 11 plan expires on Feb. 13, 2007. ROLAND PUGH: Case Summary & 12 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Roland Pugh Construction, Inc. 400 McFarland Blvd., Suite C-2 Northport, AL 35476 Bankruptcy Case No.: 06-71769 Chapter 11 Petition Date: December 1, 2006 Court: Northern District Of Alabama (Tuscaloosa) Judge: C. Michael Stilson Debtor's Counsel: Kimberly B. Glass, Esq. Maynard Cooper & Gayle PC 1901 Sixth Avenue North 2400 AmSouth/Harbert Plaza Birmingham, AL 35203 Tel: (205) 254-1221 Fax: (205) 254-1999 Estimated Assets: $1 Million to $100 Million Estimated Debts: $50,000 to $100,000 Debtor's 12 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Reynolds Inliner, LLC Subcontractor/ $65,935 1516 3rd St. W Supplier Birmingham, AL 35204 Russo Corporation Subcontractor/ $30,378 P.O. Box 190048 Supplier Birmingham, AL 35219 Job 40513 Five Mile Creek Trunk Sewer Replacement Stone & Sons Electrical Subcontractor/ $2,473 Contractors Supplier 2530 Queenstown Rd. Job 40513 Five Mile Birmingham, AL 35210 Creek Trunk Sewer Replacement State of Alabama Case # CV-05-728- $1 DCK United States of America Fine Case # CR 05- $1 PT-61-S Andy Pugh Potential 2005 $1 Executive Bonus Eddie Yessick Potential Deferred $1 Executive Bonus & Potential 2005 Executive Bonus Fred Young Potential 2005 $1 Executive Bonus Grady Pugh Claim for Stock $1 Redemption Jason Brown Potential 2005 $1 Executive Bonus Lauretta A. Harrell Rate Payer Complaint $1 in Intervention Tax Payer Complaint in Intervention Mellissa Sahagun Potential Deferred $1 Executive Bonus SCOTTS MIRACLE: Planned Recapitalization Prompts Moody's Review --------------------------------------------------------------- Moody's Investors Service placed Scotts Miracle-Gro Company's corporate family rating and senior subordinated ratings of Ba1 and Ba2, respectively, under review for possible downgrade. The review is prompted by the company's disclosure that it planned to complete a leveraged recapitalization to include returning $750 million to its shareholders through share repurchases of up to $250 million via a Dutch auction tender offer to be completed by February 2007 and a special one-time cash dividend for the balance, not to be less than $500 million. While the proposed transactions remain subject to final board of director approval, Scott's plans to finance these shareholder initiatives with a new $2.1 - $2.3 billion secured revolving credit and term loan facility. In addition to refinancing the current bank facilities, Scott's will use the remaining proceeds to launch a tender offer for its $200 million 6 5/8% senior subordinated notes. Upon the successful completion of the tender, Moody's will withdraw its ratings on the senior subordinated notes. "The review for downgrade reflects the potential for significantly increased leverage and weakened debt protection measures as a result of the proposed recapitalization," says Moody's Vice President Janice Hofferber. Moody's review will focus on: (1) the financial outlook for the company's core lawn and garden business including potential improvements in working capital and free cash flow; (2) the pace at which the company will be able to reduce leverage and improve its credit metrics following the recapitalization; and, (3) the prospect for further debt-financed shareholder value initiatives including acquisitions and share repurchases. Ratings placed under review for possible downgrade are: -- Corporate family rating of Ba1, -- Probability of default rating of Ba1; and, -- $200 million senior subordinated notes of Ba2, LGD5, 93%. The Scotts Miracle-Gro Company, with headquarters in Marysville, Ohio, is a leading manufacturer and marketer of consumer lawn care and garden products, primarily in North America and in Europe. The company also operates the Scotts Lawn Service business which provides lawn and tree and shrub fertilization, insect control and other related services in the United States. Scotts sells professional products to commercial nurseries, greenhouses, landscape service providers and specialty crop growers in North America and internationally. Sales for the last twelve months ended September 2006 were approximately $2.7 billion. SIERRA CLO: Moody's Rates $16-Million Class B-2L Notes at Ba2 ------------------------------------------------------------- Moody's Investors Service assigned these ratings to Notes issued by Sierra CLO II Ltd.: -- Aaa to $6,250,000 Class X Floating Rate Notes Due January 2013; -- Aaa to $264,000,000 Class A-1L Floating Rate Notes Due January 2021; -- Aaa to $40,000,000 Class A-1LV Floating Rate Revolving Notes Due January 2021; -- Aa2 to $34,000,000 Class A-2L Floating Rate Notes Due January 2021; -- A2 to $23,000,000 Class A-3L Floating Rate Notes Due January 2021; -- Baa2 to $15,500,000 Class B-1L Floating Rate Notes Due January 2021; and, -- Ba2 to $16,000,000 Class B-2L Floating Rate Notes Due January 2021. The Moody's ratings of the Notes address the ultimate cash receipt of all required interest and principal payments, as provided by the Notes' governing documents, and are based on the expected loss posed to noteholders, relative to the promise of receiving the present value of such payments. The ratings reflect the risks due to the diminishment of cash flow from the underlying portfolio consisting mainly of Senior Secured Loans due to defaults, the transaction's legal structure and the characteristics of the underlying assets. Centre Pacific, LLC will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. SINCLAIR BROADCAST: Moody's Holds Corporate Family Rating at Ba3 ---------------------------------------------------------------- Moody's Investors Service affirmed Sinclair Broadcast Group's Ba3 corporate family rating and assigned a Baa3 rating to its subsidiary, Sinclair Television Group, Inc.'s new $225 million Term Loan A-1 Facility. At the same time, Moody's affirmed the Baa3 ratings on Sinclair Television Group, Inc.'s existing bank credit facilities, and downgraded its 8% subordinated notes to B1 from Ba3. The rating actions comes after Sinclair's disclosure of plans to fund the redemption of Sinclair Television Group, Inc.'s 8.75% Senior Subordinated Notes due 2011 with a combination of bank debt, a draw on its $175 million revolving credit facility and cash on hand. The ratings downgrade of the subordinated notes is based on Moody's Loss Given Default methodology, and reflects the increase in senior priority debt after the refinancing. Sinclair's Ba3 corporate family rating reflects the company's high debt to EBITDA leverage, risks associated with potential future investments outside of the broadcasting sector and increasing business risk associated with the broadcast television industry's overall declining audience and the increasing diversification of advertising spending over a growing number of media. Sinclair's rating is supported by its strong EBITDA margins, diverse geographic footprint, diverse network affiliations and continued local market focus. The rating is further supported by the company's notable free cash flow generation anticipated over the rating horizon. Moody's has taken these ratings actions: * Sinclair Broadcast Group, Inc. -- Corporate Family Rating Affirmed at Ba3 -- Probability of Default Rating Affirmed at Ba3 -- 4.875% Convertible Senior Subordinated Notes due 2018 Affirmed at B2, LGD6, 92% * Sinclair Television Group, Inc. -- Secured Revolver Affirmed at Baa3; from LGD1, 8% to LGD2, 12% -- Secured Term Loan A Affirmed at Baa3; from LGD1, 8% to LGD2, 12% -- Secured Term Loan A-1 Assigned Baa3; LGD2, 12% -- 8.75% Senior Subordinated Notes due 2011 Affirmed at Ba3. Rating to be withdrawn upon completion of the redemption of the notes LGD4, 56% -- 8% Senior Subordinated Notes due 2012 Downgraded Ba3 to B1; from LGD4, 56% to LGD4, 66% -- Affirmed SGL-2 speculative grade liquidity assessment The outlook remains stable. Sinclair Broadcast Group, headquartered in Baltimore, Maryland, is a television broadcaster, operating 58 television stations in 36 markets. SKIPPERS INC: Case Summary & 19 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Skippers, Inc. aka Skippers Seafood & Chowder 170 West Dayton Street, Suite 204 Edmonds, WA 98020 Bankruptcy Case No.: 06-14414 Type of Business: The Debtor operates more than 60 seafood restaurants in Washington, Oregon, Idaho, Utah, Montana and Alaska. See http://www.skippers.net/ Chapter 11 Petition Date: December 12, 2006 Court: Western District of Washington (Seattle) Judge: Karen A. Overstreet Debtor's Counsel: Christine M. Tobin, Esq. James L. Day, Esq. Bush Strout & Kornfeld 601 Union Street, Suite 5500 Seattle, WA 98101-2373 Tel: (206) 292-2110 Total Assets: $1,940,128 Total Debts: $6,769,526 Debtor's 19 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ FSA WA $413,483 P.O. Box 34006 Seattle, WA 98124 WA State Tax Commission $182,441 506 16th Avenue Southeast Olympia, WA 98501 FSA OR $166,386 P.O. Box 34006 Seattle, WA 98124 WA Employment Security $56,029 P.O. Box 9046 Olympia, WA 98057-9046 T.J. O'Brien LLC $37,446 P.O. Box 970 Medford, OR 97501 RVM Associates, LP $30,920 National Retail Properties $29,604 Graham & Dunn P.C. $27,817 Mailbox Merchants Inc. $27,306 BNN Foods LLC $24,000 Anita Province $22,321 M. Catherine O'Brien $22,223 Tomlinson Black Management $20,960 PDC Community Centers $20,465 Explore Consulting $20,069 Pierce Co. Budget/Finance Department $19,966 Taylored Restoration Services $19,843 Walsh Design Inc. $19,403 ChemMark Inc. $18,189 SOLUTIA INC: Wants to Sell Texas Land to Shintech Inc. for $7.1MM ----------------------------------------------------------------- Solutia, Inc. and its debtor-affiliates seek permission from the U.S. Bankruptcy Court for the Southern District of New York to sell 482 acres of undeveloped flat land in Alvin, Texas, to Shintech Incorporated for $7,109,500 free and clear of liens, claims and encumbrances. Solutia, Inc., owns approximately 3,000 acres of land in Alvin, Texas -- the Chocolate Bayou Property. Solutia operates a chemical manufacturing plant on only 300 of the 3,000 acres. Of the remaining 2,700 acres, 370 acres are leased to a third party, 245 acres are covered by a reservoir and the remaining 2,085 acres are unoccupied and undeveloped flat land. Jonathan S. Henes, Esq., at Kirkland & Ellis LLP, in New York, relates that Solutia does not utilize the Unoccupied Chocolate Bayou Property, other than for underground pipelines, above ground transportation and for certain waste management activities related to the operation of the Chocolate Bayou Plant. On Dec. 6, 2006, Solutia entered into an agreement to sell the approximately 482 acres of undeveloped flat land in the Chocolate Bayou Property to Shintech for $7,109,500. The Sale Process James T. Strehl, general manager of the Basic Chemicals Group at Solutia, relates that in April 2006, the company was approached by an agent acting on behalf of an anonymous buyer, later revealed to be Shintech. Houston, Texas-based Shintech is the largest producer of the chemical polyvinyl chloride in the United States. Shintech sought to purchase a parcel of the Unoccupied Chocolate Bayou Property to construct a chemical manufacturing plant. Shintech is a subsidiary of the Japanese diversified chemicals company, Shin-Etsu Chemical Co., Ltd. Shintech initially offered to purchase approximately 900 acres of the Unoccupied Chocolate Bayou Property for $6,200 per acre, for a total purchase price of $5,580,000. To evaluate the offer, in July 2006, Solutia hired American Appraisal Associates to perform an appraisal of the 900 acres of Unoccupied Chocolate Bayou Property. American Appraisal submitted an appraisal report to Solutia, dated September 1, 2006, which concluded that Shintech's initial offer of $6,200 per acre exceeded the appraised value of the land. The Appraisal Report assumed it would take Solutia 12 to 24 months to sell the land for the appraised amount. After the Parties executed a letter of intent and Shintech began its due diligence, the Parties engaged in good faith, arm's- length negotiations. These negotiations resulted in the Parties agreeing that Shintech would purchase only 482 acres of the Unoccupied Chocolate Bayou Property for $14,750 an acre, or a total price of $7,109,500. The Purchase Price represents an increase of $8,550 per acre over Shintech's initial offer, Mr. Henes notes. The Purchase Agreement Pursuant to the CB Land Purchase Agreement, Shintech will pay the $7,109,500 purchase price at closing in cash. Shintech also agreed to allow Solutia to continue to run its underground pipes and above ground transportation over the Sale Property. Other terms of the CB Land Purchase Agreement are: Earnest Money: Shintech paid Solutia a $25,000 non-refundable deposit, which will be credited against the Purchase Price. Shintech also deposited $475,000 with Stewart Title Company, as Escrow Agent. This amount will be credited against the Purchase Price, or in the event the Sale is not consummated, it will be distributed pursuant to the terms of the Escrow Agreement. Title/ Permitted Encumbrances: Solutia presently has and will convey to Shintech good and indefeasible title to the Property on the Closing Date subject only to: (i) general real estate taxes for the current year, (ii) local, state and federal laws, ordinances or governmental regulations, (iii) any title matter approved, or caused, by Shintech, (iv) existing easements and other rights-of- way affecting the Property, and (v) the Ancillary Agreements. Covenants: Solutia agrees to use good faith efforts to obtain approval of the Sale by December 28, 2006. The Parties will use good faith efforts to negotiate the terms of the Ancillary Agreements. Conditions to Closing: The Conditions to Shintech's Obligation to Close are typical for a transaction of this type, including: (i) all of Solutia's representations and warranties will be true and correct, (ii) no encumbrances or title defects other than Permitted Encumbrances, (iii) all of Solutia's covenants performed, (iv) no material adverse change in the condition of the Property, (v) the Parties have agreed upon the terms of the Ancillary Agreements, and (vi) to preserve the December 29, 2006 closing date, an Approval Order obtained by no later than December 28, 2006. The Conditions to Solutia's Obligation to Close are typical for a transaction of this type, including: (i) all of Shintech's representations and warranties will be true and correct, (ii) Shintech will have performed all covenants, (iii) Approval Order will be obtained by March 31, 2007 and (iv) the Parties will have agreed upon the terms of the Ancillary Agreements. Proration of Taxes: General real estate taxes for the current year relating to the Property will be allocated between Solutia and Shintech based on the Closing Date. Attorneys' Fees & Legal Expenses: If either party institutes any action or proceeding related to the CB Land Purchase Agreement, the prevailing party is entitled to receive all reasonable attorneys' fees and court costs from the losing party. Right of First Refusal: In the event Shintech acquires the Sale Property, but does not construct a chemical manufacturing facility on it, and subsequently decides to sell all or part of the Property, it will provide Solutia the right to meet a bona fide third-party offer for the purchase of the Property. Mr. Strehl relates that, because Shintech wants to promptly begin construction of a chemical plant on the Sale Property, the Parties agreed that time was of the essence and set a Dec. 29, 2006 closing date if the Court approves the Proposed Sale in advance of the closing. If Solutia cannot obtain Court approval by Dec. 28, 2006, Shintech may terminate the CB Agreement by providing written notice to Solutia. If Solutia objects to the notice within five days of receipt and provides evidence that it has made and is continuing to make good faith efforts to obtain Court approval, however, Solutia has until March 31, 2007, to obtain the Approval Order. Sale Free of Liens & Encumbrances Pursuant to Section 363(f) of the Bankruptcy Code, Solutia intends to sell the Property to Shintech free and clear of liens, claims, encumbrances and other interests, other than the customary Permitted Encumbrances set forth in the CB Land Purchase Agreement. Only two parties have asserted liens on the Sale Property- Citicorp USA, Inc., as collateral agent for the Debtors' DIP financing lenders, and Fluor Corporation. Citicorp has consented to the Proposed Sale as a permitted disposition under Solutia's postpetition credit facility. Pursuant to a Transfer Notice dated June 5, 2006, Fluor transferred its claim to Longacre Master Fund, Ltd. Solutia is seeking Longacre's consent to the Proposed Sale. In the event Longacre's Consent is obtained, Section 363(f)(2) will be satisfied, Mr. Henes relates. But if Longacre does not consent, Longacre could be compelled to accept a monetary satisfaction of their liens. Thus, according to Mr. Henes, Section 363(f)(5) is satisfied and any liens asserted against the Sale Property will be adequately protected through attachment to the net proceeds of the Proposed Sale. Private Sale of Property Pursuant to Bankruptcy Rule 6004(f)(1), sales of estate property not in the ordinary course may be by private sale or public auction. Private sales by debtors outside of the ordinary course of business are appropriate where the debtors demonstrate that the sale is permissible pursuant to Section 363. Based on Shintech's specific need for the Sale Property and that the Purchase Price is significantly more than the appraised value of the approximately 482 acres, Solutia has determined that a private sale of the Sale Property to Shintech is in the best interests of its estate and its stakeholders. As a strategic purchaser seeking to build a chemical plant, Shintech has agreed to pay a premium for the Sale Property compared to other potential purchasers. Accordingly, it is unlikely that an auction of the Sale Property would produce a higher offer, and the delay and additional costs to conduct an auction are not necessary, Mr. Henes tells Judge Beatty. About Solutia Inc. Headquartered in St. Louis, Missouri, Solutia, Inc. (OTCBB:SOLUQ) -- http://www.solutia.com/-- with its subsidiaries, make and sell a variety of high-performance chemical-based materials used in a broad range of consumer and industrial applications. The Company filed for chapter 11 protection on Dec. 17, 2003 (Bankr. S.D.N.Y. Case No. 03-17949). When the Debtors filed for protection from their creditors, they listed US$2,854,000,000 in assets and US$3,223,000,000 in debts. Solutia is represented by Richard M. Cieri, Esq., at Kirkland & Ellis. Daniel H. Golden, Esq., Ira S. Dizengoff, Esq., and Russel J. Reid, Esq., at Akin Gump Strauss Hauer & Feld LLP represent the Official Committee of Unsecured Creditors, and Derron S. Slonecker at Houlihan Lokey Howard & Zukin Capital provides the Creditors' Committee with financial advice. (Solutia Bankruptcy News, Issue No. 74; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) SUN-TIMES MEDIA: Suspends $0.05 Per Share Quarterly Dividend ------------------------------------------------------------ Sun-Times Media Group Inc.'s Board of Directors has completed its review of its dividend policy and has voted to suspend the company's quarterly dividend of $0.05 per share. The company's Board of Directors has determined that it is not prudent to pay a dividend at this time in light of the significant shortfall in operating performance and cash flow due to ongoing weakness in the Chicago advertising market, as well as the company's continued exposure to contingent tax liabilities, the final outcome of which remains uncertain. The Board will reconsider regular dividend payments and other forms of cash distribution to shareholders, as appropriate, taking into account operating performance and the status of the company's contingent tax liabilities. About Sun-Times Media Group Chicago, Ill.-based Sun-Times Media Group Inc. (NYSE: SVN) -- http://www.thesuntimesgroup.com-- fka Hollinger International Inc., owns the Chicago Sun-Times and Suntimes.com as well as newspapers and Web sites serving 120 communities across Chicago. SUPERVALU INC: Albertson's Plans Delisting of Term Units at NYSE ---------------------------------------------------------------- New Albertson's Inc., a wholly owned subsidiary of SUPERVALU INC., (NYSE:SVU), has notified the New York Stock Exchange of its intention to voluntarily delist its 7.25% Hybrid Income Term Security Units held in the form of Corporate Units. The Corporate Units are currently traded on the NYSE under the symbol ABSPR. New Albertson's also intends to deregister the Corporate Units from registration with the Securities and Exchange Commission. To complete the delisting and deregistration, New Albertson's intends to file a Form 25 with the Securities and Exchange Commission on Dec. 26, 2006 and expects the filing to be declared effective on Jan. 8, 2007. It is expected that the NYSE will suspend trading of the Corporate Units beginning on Jan. 8, 2007. The Corporate Units were the subject of an offer by SUPERVALU to purchase any and all outstanding Corporate Units which expired by its terms on Nov. 20, 2006. Pursuant to the Offer, SUPERVALU purchased 34,783,232 Corporate Units, or approximately 75.7% of the 45,970,800 issued and outstanding Corporate Units, leaving 11,187,568 Corporate Units outstanding. "regardless of the number of Corporate Units retired and canceled in the Offer, it is expected that, following the consummation of the Offer, New Albertson's will seek to delist the Corporate Units from the NYSE and eventually suspend its reporting obligation under the Exchange Act" SUPERVALU and New Albertson's, in the Offer to Purchase relating to the Offer, stated. As a result, following the consummation of the Offer, there may no longer be an established reporting system or trading market in the Corporate Units, although they may be traded over-the-counter." Consistent with the Offer to Purchase, New Albertson's has notified the NYSE of its intention to delist the Corporate Units from the NYSE and has not arranged for listing or quotation of the Corporate Units on another national securities exchange or quotation medium. The delisting will allow New Albertson's eventually to suspend its separate reporting requirements under the Exchange Act and eliminate related expenses. About Supervalu Inc Supervalu Inc., (NYSE:SVU) headquartered in Eden Prairie, Minnesota, is the country's third largest supermarket chain, with more than 2,500 stores, including the core supermarket operations of Albertson's, Inc. acquired on June 2, 2006. Supervalu also has a food distribution business serving more than 5,000 grocery stores. For the fiscal year to end in February 2007, sales are estimated to range from $37 billion to $38 billion. * * * On Oct 25, 2006, Moody's Investors Service assigned a rating of B1 and a Loss-Given-Default assessment of LGD4 (60%) to Supervalu Inc.'s new $500 million senior unsecured notes. The outlook remains stable. TCR I: Disclosure Statement Hearing to Proceed on January 9 ----------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Virginia will continue the hearing to consider approval of the disclosure statement explaining TCR I, Inc.'s Joint Chapter 11 Plan of Reorganization on Jan. 9, 2007, at 10:00 a.m. The hearing will be held at 200 South Washington Street, 3rd Floor, Courtroom III in Alexandria, Virginia. As reported in the Troubled Company Reporter on July 18, 2006, the Debtor's Plan will be funded from normal cash flow generated by operations. The Debtor functions as a management organization for seven assisted living facilities and is also a holding company that owns, directly or indirectly, six assisted living facilities. According to the Debtor 50% of the net cash flow from these facilities will be placed in the Plan Funds to pay creditors. Under the Debtor's Plan, all administrative claims will be paid in full. Priority Tax Claims from the Internal Revenue Service amounting $9,847 plus statutory interest will be paid equal quarterly installments of principal and interest at the statutory rate over a one-year period until paid in full. Union Bank & Trust holding Secured Claims totaling $800,000 plus interest will receive in full payment, with interest: * $2,400 monthly payment will be applied to the $375,000 note held by Union Bank; and * secured by a first deed of trust on the residence of Charles V. Rice, the Debtor's principal. Creditors holding Unsecured Claims against TCR and Mr. Rice will be paid annually over five years. Payments will be comprised of 50% of the net cash flow from the TCR and Rice Assets, which amounts will be placed into the TCR and the Rice Plan Fund and paid annually to the TCR and Rice creditors. Interest Holders will receive no distributions under the Plan. TCR I, Inc., filed for chapter 11 protection on September 8, 2005 (Bankr. E.D. Va. Case No. 05-13450). Bruce W. Henry, Esq., at Henry, O'Donnell, Dahnke & Walther, PC, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $6,980,559 in assets and $37,059,268 in debts. TEXOLA ENERGY: Gets Additional 10,000 Acres of Oil & Gas Leases --------------------------------------------------------------- Texola Energy Corp. reported that it has successfully acquired an additional 10,000 acres of oil and gas leases, covering its Maverick Springs Prospect in a lease sale on Dec. 12, 2006, at the Nevada Bureau of Land Management, bringing its total leased acreage to approximately 130,000 acres. Since the company's acquisition of its initial acreage position of some 120,000 acres in March 2006, Texola Energy, in co-operation with Cedar Strat Corp., as disclosed on Aug. 22, 2006, was successful in defining what it believes are two large anticline structures on the Maverick Springs Prospect. In mapping out what it believes to be the location of these anticlines, there existed some 10,000 acres that were key to containing 100% of the two anticlines covering the Maverick Springs Prospect. Management was reluctant to provide too much earlier detail on its proposed anticline structures pending the lease sale, so as not to create competitive bidding on the newly acquired acreage. With the acreage having been acquired, Texola Energy can now proceed with its ongoing exploration over the anticlines having in hand 100% of what it believes to be the prospective land areas. About Texola Energy Headquartered in Vancouver, British Columbia, Texola Energy Corp. (OTCBB:TXLA) -- http://www.texolaenergy.comexplores/-- and develops large scale, early stage oil and gas projects in North America. The company has recently took various exploration initiatives in Nevada and in Northern Alberta, Canada. Going Concern Doubt Staley, Okada & Partners, in Vancouver, BC, Canada, raised substantial doubt about Texola Energy Corporation's ability to continue as a going concern after auditing the Company's consolidated financial statements for the years ended Dec. 31, 2005 and 2004. The auditor pointed to the company's recurring losses from operations. The company is dependent upon financing to continue operations. UNITED COMPONENTS: UCI Holdco to Offer $235 Million of PIK Notes ---------------------------------------------------------------- United Components Inc.'s ultimate parent company, UCI Holdco Inc. is proposing to offer in a private placement $235 million aggregate principal amount of floating rate senior PIK Notes due 2013, subject to market conditions. The company disclosed that only qualified institutional buyers under Rule 144A and certain non-U.S. persons under Regulation S may participate in the offering. The net proceeds of the offering will be used, together with cash on hand, to pay a special dividend to UCI Holdco's stockholders in an amount of $260 million. The company also disclosed that the Notes to be offered have not been registered under the United States Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. The issuance of the Notes will be structured to allow secondary market trading under Rule 144A under the Securities Act of 1933. United Components, Inc. -- http://www.ucinc.com/-- supplies a range of products to the automotive, trucking, marine, mining, construction, agricultural, and industrial vehicle markets. The company's customer base includes leading aftermarket companies as well as a diverse group of original equipment manufacturers in North America. * * * As reported in the Troubled Company Reporter on Dec. 14, 2006, Moody's Investors Service assigned a Caa2 rating to the unguaranteed senior unsecured notes of UCI Holdco Inc., the ultimate parent of United Components Inc. The rating agency also lowered the Corporate Family and Probability of Default ratings to B3 from B2, and repositioned these ratings at the Holdco level. Standard & Poor's Ratings Services lowered its corporate credit rating on United Components Inc. to 'B+' from 'BB-' and its rating on UCI's $230 million senior subordinated notes to 'B-' from 'B'. VISIPHOR CORP: Grants 948,133 Options to Officers and Directors --------------------------------------------------------------- Visiphor Corporation has granted a total of 948,133 options to its officers and directors at an exercise price of $0.13 with an expiry date of Dec. 6, 2009. The options replace the same number of options that expired on Dec. 5, 2006. One third of these options will vest immediately, one third will vest one year from the date of grant, and the final third will vest two years from the date of grant. The common shares underlying the options will have a four-month hold period that expires on April 6, 2007. Based in Burnaby, British Columbia, Visiphor Corporation (OTCBB: VISRF; TSX-V: VIS; DE: IGYA) -- http://www.imagistechnologies.com/ -- fka Imagis Technologies Inc., specializes in developing and marketing software products that enable integrated access to applications and databases. The company also develops solutions that automate law enforcement procedures and evidence handling. These solutions often incorporate Visiphor's proprietary facial recognition algorithms and tools. Using industry standard "Web Services", Visiphor delivers a secure and economical approach to true, real-time application interoperability. The corresponding product suite is referred to as the Briyante Integration Environment. Going Concern Doubt As reported in the Troubled Company Reporter on Nov. 24, 2005, KPMG LLP expressed substantial doubt about Visiphor's ability to continue as a going concern after it audited the Company's financial statements for the years ended Dec. 31, 2004 and 2003. The auditing firm pointed to the Company's recurring losses from operations, deficiency in operating cash flow and deficiency in working capital. WESTERN OAKS: Case Summary & 8 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Western Oaks Partners Ltd. 300 South Orange Grove Blvd. #2 Pasadena, CA 91105 Bankruptcy Case No.: 06-16362 Chapter 11 Petition Date: December 4, 2006 Court: Central District Of California (Los Angeles) Judge: Ellen Carroll Debtor's Counsel: Robert M. Yaspan, Esq. Law Offices of Yaspan & Thau 21700 Oxnard Street, Ste. 1750 Woodland Hills, CA 91367 Tel: (818) 774-9929 Total Assets: $5,884,000 Total Debts: $6,416,200 Debtor's 8 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Wachovia Securities Bank $6,400,000 Attn: Commercial Financials P.O. Box 563954 Charlotte, NC 28256 Triumph Property Services $8,200 9545 Katy Freeway, Suite 405 Houston, TX 77024 Exceptional Landscaping $4,000 5925 Burgundy Road Dallas, TX 75230 Complete General Maintenance $2,000 Allied Waste Services $900 Citywide Building Services $500 Reliant Energy $400 Terminix $200 * Proposed Air Mergers Spur Congress to Plan Hearing ---------------------------------------------------- Congress is preparing for hearings to study the effect of probable airline mergers could on the economy, Marilyn Geewax at Cox News Service reports. The hearings are expected to proceed in January 2007. While congress has no part in approving mergers, it could influence public views and raise political pressure to reject the deal on antitrust grounds, Ms. Geewax says. US Airways Group raised a stir after making an unsolicited $8.7- billion bid for Delta Air Lines Inc. Rep. John Lewis of the fifth district of Georgia has reportedly said that congressmen representing cities in Atlanta, Cincinnati, Pittsburgh, Philadelphia, Salt Lake City, Phoenix, Charlotte, N.C. and others, which the two carriers have major operations, have expressed fears that a merger would result to job losses, air service reduction, higher ticket prices and a loss of competition between carriers. * Fried Frank Opens Offices in Hong Kong & Adds Nine New Partners ----------------------------------------------------------------- Fried, Frank, Harris, Shriver & Jacobson LLP has launched its office in Hong Kong, in association with local Hong Kong law firm Huen Wong & Co. Fried Frank's office in Hong Kong will provide clients with access to the firm's U.S., European and international expertise in M&A, private equity, capital markets, finance, real estate and litigation, working in combination with Huen Wong & Co.'s M&A, capital markets, real estate and litigation practices. The firm discloses that Huen Wong, Michael M. Hickman, Raymond Kwok, Victoria Lloyd, and Liang Tsui have joined Fried Frank as partners, and that Stephen Mok, Philip T. Nunn, Joseph Lee and Gilbert Ho will be joining as partners in early 2007. "Asia is very important for the firm's international growth plans and Fried Frank's strength and depth of expertise across a range of practices will provide a strong platform in the region," said Valerie Ford Jacob, Fried Frank's Chairperson. "Fried Frank is very effective at combining well-configured international expertise together with local law capability. The addition of this team, with strong relationships in China, provides us with an opportunity to capitalize on the growing demands from our existing clients as well as forge new relationships throughout Asia," said Justin Spendlove, the firm's Managing Partner. "I am looking forward to working with Fried Frank, a market leader both in the US and Europe. As someone who has observed Fried Frank's impressive growth in the international arena over the past several years, I am pleased to partner with a firm with such momentum behind it. I am excited by the prospect of extending that leadership position to Hong Kong as well as throughout Asia," said Huen Wong. Fried Frank has had an international presence since 1970 when it became one of the first U.S. firms to open an office in London. Over the past 18 months Fried Frank has doubled the size of its European practice in London, Paris and Frankfurt. With the addition of the new lawyers in Asia, Fried Frank will have approximately 120 lawyers in its offices outside of the U.S. In 2006, the firm advised on some of the most noteworthy matters of the year including the $67 billion ATT-BellSouth merger, the Silver Point acquisition of CF Gomma Barre Thomas, and the formation of the largest European private equity fund, Permira IV. New Partners Huen Wong has extensive knowledge of PRC law and practice. His particular experience covers a broad range of fields such as joint ventures, securities, licensing, building and construction projects and arbitration both in Hong Kong and the region, particularly in China. Mr. Wong is a China-appointed Attesting Officer and is on the panel of foreign arbitrators for CIETAC and the Arbitration Commissions in Beijing, Shanghai and Dalian. He is admitted as a solicitor in England, Wales, Hong Kong, Singapore and Australian Capital Territory. He joins Fried Frank from Simmons & Simmons where he was managing partner for the China region with responsibility for both the Hong Kong and Shanghai offices. Michael M. Hickman has a wealth of experience in joint ventures, corporate reorganization, and mergers and acquisitions, including assisting major U.S.-based private equity investors with investments in a range of targeted industry sectors. He also has extensive experience in privatizations and commercial and corporate finance transactions. Fluent in Mandarin and English, he has lived and worked in Asia for over 20 years and is admitted to practice law in New York. He joins Fried Frank from Simmons & Simmons where he was resident partner of the Simmons & Simmons Shanghai office. Raymond Kwok is one of Asia's leading real estate practitioners, and has extensive expertise across a broad range of property and property-related matters in Hong Kong and China. He focuses his practice in real estate and infrastructure development, acquisitions and disposals, property litigation, property financing, planning and project conveyancing. He has been advising on China-related matters for 17 years and is a China- Appointed Attesting Officer. Mr. Kwok is admitted to practice law in England, Wales and Hong Kong. He joins Fried Frank from Simmons & Simmons. Victoria Lloyd advises corporations and investment banks on a wide range of corporate and commercial, corporate finance and merger and acquisition matters, including funding raising activities, international securities offerings and joint ventures. She is fluent in Cantonese, Mandarin and English. She is qualified as a solicitor in Hong Kong, England and Wales. She joins Fried Frank from Simmons & Simmons. Liang Tsui has extensive experience in advising multi-nationals on foreign direct investment and M&A transactions in China. He has worked with a number of global clients who are active in the Chinese market in the chemical, automotive, financial services, insurance, manufacturing and construction sectors and has acted for a number of US, UK, Swiss and French companies on major corporate restructuring, investment and joint venture projects. He speaks fluent Mandarin and English. He is qualified to practice law in the US. He joins Fried Frank from Simmons & Simmons. Stephen Mok focuses his practice on mergers and acquisitions and corporate finance, and has extensive experience with initial public offerings on the Hong Kong Stock Exchange. His experience also encompasses PRC securities transactions, joint ventures, cross-border mergers and acquisitions and general commercial work. He is admitted to practice as a solicitor in New South Wales, Australia, in England, Wales and Hong Kong. He joins Fried Frank from Simmons & Simmons where he was head of the China corporate group. Philip T. Nunn has 30 years' experience in development and construction matters. Over this period, he has handled a large number of major construction litigation and arbitration cases and has significant experience as an arbitrator. He is a member of the HKIAC Panel of Arbitrators, a member of the CIETAC Panel of Arbitrators and the Korean Commercial Arbitration Board Panel of Arbitrators, Chairman of the ICC Arbitration Committee in Hong Kong, a member of the Hong Kong Housing Authority, a member of the Strategic Planning Committee of the Housing Authority, Chairman of the Building Committee of the Housing Authority, a member of the Property Committee of the Kowloon-Canton Railway Corporation, and Co-chairman of the Appeal Tribunal (Buildings). He is admitted to practice law in England, Wales and Hong Kong. He joins Fried Frank from Simmons & Simmons. Joseph Lee focuses his practice on corporate finance and securities transactions, with a special emphasis on initial public offerings relating to Hong Kong and Chinese companies and mergers and acquisitions of listed and private companies. He speaks fluent English, Cantonese and Mandarin. He is admitted to practice as a solicitor in Hong Kong and as a barrister and solicitor in British Columbia, Canada. He joins Fried Frank from Simmons & Simmons. Gilbert Ho focuses his practice on corporate finance, equity capital markets in Hong Kong and China, mergers and acquisitions and general commercial transactions. He speaks fluent English, Cantonese and Mandarin. He is admitted to practice as a solicitor in England and Wales and as a barrister and solicitor in New South Wales, Australia. He joins Fried Frank from Simmons & Simmons. About Fried Frank Fried, Frank, Harris, Shriver & Jacobson LLP -- http://www.friedfrank.com/-- is an international law firm with more than 550 attorneys in offices in New York, Washington, D.C., London, Paris and Frankfurt. Fried Frank lawyers regularly represent major investment banking firms, private equity houses and hedge funds, as well as many of the largest companies in the world. The firm offers legal counsel on M&A and corporate finance matters, white-collar criminal defense and civil litigation, securities regulation, compliance and enforcement, government contracts, real estate, tax, bankruptcy, antitrust, benefits and compensation, intellectual property and technology, international trade, and trusts and estates. * BOND PRICING: For the week of December 11 - December 16, 2006 --------------------------------------------------------------- Issuer Coupon Maturity Price ------ ------ -------- ----- ABC Rail Product 10.500% 12/31/04 0 Adelphia Comm. 3.250% 05/01/21 0 Adelphia Comm. 6.000% 02/15/06 0 Aetna Industries 11.875% 10/01/06 11 AHI-DFLT07/05 8.625% 10/01/07 50 Allegiance Tel. 11.750% 02/15/08 45 Allegiance Tel. 12.875% 05/15/08 46 Amer & Forgn Pwr 5.000% 03/01/30 69 Amer Color Graph 10.000% 06/15/10 69 Amer Tissue Inc 12.500% 07/15/06 1 Antigenics 5.250% 02/01/25 66 Anvil Knitwear 10.875% 03/15/07 67 Archibald Candy 10.000% 11/01/07 0 Atlantic Coast 6.000% 02/15/34 13 Autocam Corp. 10.875% 06/15/14 29 Bank New England 8.750% 04/01/99 8 Bank New England 9.500% 02/15/96 17 Bank New England 9.875% 09/15/99 9 BBN Corp 6.000% 04/01/12 0 Budget Group Inc 9.125% 04/01/06 0 Burlington North 3.200% 01/01/45 58 Calpine Corp 4.000% 12/26/06 48 Calpine Corp 6.000% 09/30/14 71 Calpine Corp 7.750% 06/01/15 69 Cell Therapeutic 5.750% 06/15/08 70 Cell Therapeutic 5.750% 06/15/08 74 Central Tractor 10.625% 04/01/07 0 Chic East Ill RR 5.000% 01/01/54 57 CHS Electronics 9.875% 04/15/05 2 Clark Material 10.750% 11/15/06 0 Collins & Aikman 10.750% 12/31/11 3 Color Tile Inc 10.750% 12/15/01 0 Comcast Corp 2.000% 10/15/29 41 Conseco Inc 8.500% 10/15/02 0 Dal-Dflt09/05 9.000% 05/15/16 64 Dana Corp 7.000% 03/01/29 74 Dana Corp 10.125% 03/15/10 74 Decode Genetics 3.500% 04/15/11 71 Delco Remy Intl 9.375% 04/15/12 36 Delco Remy Intl 11.000% 05/01/09 40 Delta Air Lines 2.875% 02/18/24 65 Delta Air Lines 7.700% 12/15/05 65 Delta Air Lines 7.900% 12/15/09 67 Delta Air Lines 8.000% 06/03/23 67 Delta Air Lines 8.300% 12/15/29 69 Delta Air Lines 9.250% 03/15/22 66 Delta Air Lines 9.250% 12/27/07 59 Delta Air Lines 9.750% 05/15/21 68 Delta Air Lines 10.000% 08/15/08 65 Delta Air Lines 10.125% 05/15/10 64 Delta Air Lines 10.375% 02/01/11 64 Delta Air Lines 10.375% 12/15/22 69 Delta Mills Inc 9.625% 09/01/07 22 Deutsche Bank NY 8.500% 11/15/16 73 Diva Systems 12.625% 03/01/08 1 Dov Pharmaceutic 2.500% 01/15/25 45 Drum Financial 12.875% 09/15/99 0 Dura Operating 8.625% 04/15/12 32 Dura Operating 9.000% 05/01/09 5 E.Spire Comm Inc 10.625% 07/01/08 0 E.Spire Comm Inc 13.750% 07/15/07 0 Eagle Family Food 8.750% 01/15/08 74 Exodus Comm Inc 11.250% 07/01/08 0 Falcon Products 11.375% 06/15/09 2 Family Golf Ctrs 5.750% 10/15/04 0 Fedders North AM 9.875% 03/01/14 69 Federal-Mogul Co. 7.375% 01/15/06 68 Federal-Mogul Co. 7.500% 01/15/09 70 Federal-Mogul Co. 8.160% 03/06/03 66 Federal-Mogul Co. 8.250% 03/03/05 67 Federal-Mogul Co. 8.330% 11/15/01 68 Federal-Mogul Co. 8.370% 11/15/01 63 Federal-Mogul Co. 8.370% 11/15/01 66 Federal-Mogul Co. 8.800% 04/15/07 70 Finova Group 7.500% 11/15/09 29 Ford Motor Co 6.500% 08/01/18 73 Ford Motor Co 6.625% 02/15/28 72 Ford Motor Co 7.125% 11/15/25 73 Ford Motor Co 7.400% 11/01/46 72 Ford Motor Co 7.700% 05/15/97 72 Ford Motor Co 7.750% 06/15/43 74 GB Property Fndg 11.000% 09/29/05 57 Golden Books Pub 10.750% 12/31/04 0 Gulf Mobile Ohio 5.000% 07/01/32 71 HNG Internorth 9.625% 03/15/06 31 Insight Health 9.875% 11/01/11 25 Iridium LLC/CAP 10.875% 07/15/05 27 Iridium LLC/CAP 11.250% 07/15/05 28 Iridium LLC/CAP 13.000% 07/15/05 29 Iridium LLC/CAP 14.000% 07/15/05 30 Isolagen Inc. 3.500% 11/01/24 75 IT Group Inc 11.250% 04/01/09 0 Kaiser Aluminum 9.875% 02/15/02 30 Kaiser Aluminum 12.750% 02/01/03 6 Kellstrom Inds 5.750% 10/15/02 0 Kmart Funding 9.440% 07/01/18 20 Lehman Bros Hldg 10.000% 10/30/13 75 Liberty Media 3.750% 02/15/30 62 Liberty Media 4.000% 11/15/29 66 Lifecare Holding 9.250% 08/15/13 68 Macsaver Financl 7.400% 02/15/02 5 Macsaver Financl 7.600% 08/01/07 5 Macsaver Financl 7.875% 08/01/03 0 Merisant Co 9.500% 07/15/13 58 MRS Fields 9.000% 03/15/11 73 Muzak LLC 9.875% 03/15/09 73 New Orl Grt N RR 5.000% 07/01/32 71 Northern Pacific RY 3.000% 01/01/47 58 Northern Pacific RY 3.000% 01/01/47 58 Northwest Airlines 9.152% 04/01/10 7 Northwest Airlines 9.179% 04/01/10 28 Northwst Stl&Wir 9.500% 06/15/01 0 NTK Holdings Inc 10.750% 03/01/14 71 Nutritional Src 10.125% 08/01/09 65 Oakwood Homes 7.875% 03/01/04 9 Oakwood Homes 8.125% 03/01/09 9 Oscient Pharm 3.500% 04/15/11 70 Outboard Marine 7.000% 07/01/02 0 Outboard Marine 9.125% 04/15/17 0 Overstock.com 3.750% 12/01/11 74 Pac-West-Tender 13.500% 02/01/09 25 PCA LLC/PCA Fin 11.875% 08/01/09 19 Pegasus Satellite 9.625% 10/15/49 13 Pegasus Satellite 12.375% 08/01/08 10 Pegasus Satellite 12.500% 08/01/07 9 Pegasus Satellite 13.500% 03/01/07 0 Phar-mor Inc 11.720% 09/11/02 0 Piedmont Aviat 10.250% 01/15/49 8 Pixelworks Inc 1.750% 05/15/24 74 Pliant Corp 13.000% 07/15/10 52 Polaroid Corp 6.750% 01/15/02 0 Polaroid Corp 7.250% 01/15/07 0 Polaroid Corp 11.500% 02/15/06 0 Primus Telecom 3.750% 09/15/10 38 Primus Telecom 8.000% 01/15/14 60 Primus Telecom 12.750% 10/15/09 72 PSINET Inc 10.500% 12/01/06 0 Radnor Holdings 11.000% 03/15/10 0 Railworks Corp 11.500% 04/15/09 1 Read-Rite Corp. 6.500% 09/01/04 5 Renco Metals Inc 11.500% 07/01/03 0 S3 Inc 5.750% 10/01/03 0 Scotia Pac Co 7.110% 01/20/14 73 Spinnaker Inds 10.750% 10/15/06 0 Tom's Foods Inc 10.500% 11/01/04 9 Tribune Co 2.000% 05/15/29 70 Trism Inc 12.000% 02/15/05 0 United Air Lines 7.270% 01/30/13 56 United Air Lines 9.020% 04/19/12 56 United Air Lines 9.200% 03/22/08 49 United Air Lines 9.210% 01/21/17 9 United Air Lines 9.300% 03/22/08 49 United Air Lines 9.350% 04/07/16 33 United Air Lines 9.560% 10/19/18 57 United Air Lines 9.760% 12/31/49 0 United Air Lines 10.020% 03/22/14 45 United Air Lines 10.110% 02/19/49 48 United Air Lines 10.850% 02/19/15 48 United Homes Inc 11.000% 03/15/05 0 US Air Inc. 7.500% 04/15/08 0 US Air Inc. 10.250% 01/15/49 5 US Air Inc. 10.250% 01/15/49 0 US Air Inc. 10.800% 01/01/49 10 USAutos Trust 2.212% 03/03/11 8 Venture Holdings 11.000% 06/01/07 0 Venture Holdings 12.000% 06/01/09 0 Vesta Insurance Group 8.750% 07/15/25 6 Werner Holdings 10.000% 11/15/07 8 Westpoint Steven 7.875% 06/15/08 0 Winstar Comm 14.000% 10/15/05 0 Winstar Comm Inc 12.500% 04/15/08 0 Winstar Comm Inc 12.750% 04/15/10 0 World Access Inc 4.500% 10/01/02 4 World Access Inc 13.250% 01/15/08 5 Xerox Corp 0.570% 04/21/18 42 Ziff Davis Media 12.000% 07/15/10 42 ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Marie Therese V. Profetana, Robert Max Victor M. Quiblat II, Shimero R. Jainga, Joel Anthony G. Lopez, Melvin C. Tabao, Rizande B. Delos Santos, Cherry A. Soriano-Baaclo, Ronald C. Sy, Jason A. Nieva, Lucilo M. Pinili, Jr., Tara Marie A. Martin, and Peter A. Chapman, Editors. Copyright 2006. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $725 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***